On November 9, 2016 Galena Biopharma, Inc. (NASDAQ: GALE), a biopharmaceutical company committed to the development and commercialization of hematology and oncology therapeutics that address unmet medical needs, reported its financial results and provided a corporate update for the quarter ended September 30, 2016 (Filing, Q3, Galena Biopharma, 2016, NOV 9, 2016, View Source [SID1234516646]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"Over the past several weeks we have collaborated with regulatory experts and world leaders in the treatment of myeloproliferative neoplasms on key elements of the trial design for our pivotal, Phase 3 trial that we expect to initiate in the second quarter of 2017," said Mark W. Schwartz, Ph.D., President and Chief Executive Officer. "Essential thrombocythemia is a chronic condition in patients presenting with elevated platelets and the limited available treatment options often include challenging side effects. We believe that GALE-401, our controlled release version of anagrelide, could be both effective at lowering platelets and improve the side effect profile from the immediate release version currently available."

As previously announced, Galena discontinued its NeuVax (nelipepimut-S) Phase 3 PRESENT (Prevention of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment) clinical trial due to futility in accordance with the recommendation from the Independent Data Monitoring Committee (IDMC). On today’s call, management will present the top-line data from the trial and its assessment of the results.

Dr. Schwartz continued, "With a better understanding of the interim data in the PRESENT trial, we have the knowledge and experience to guide our immunotherapy programs through clinical development, reinforcing my belief and confidence in our pipeline. As the cancer immunotherapy field focuses on combination treatments, we continue to advance our NeuVax plus trastuzumab clinical trials and evaluate additional indications where NeuVax may benefit patients in combination with other agents. Similarly, our GALE-301 and GALE-302 trials remain ongoing with two additional data presentations this year."

Galena will host a webcast and conference call today at 2:00 p.m. P.T./5:00 p.m. E.T. to discuss its financial and business results. The live webcast will include slides that can be accessed on the Company’s website under the Investors section/Events and Presentations: View Source The conference call can be accessed by dialing (844) 825-4413 toll-free in the U.S., or (973) 638-3403 for participants outside the U.S. The Conference ID number is: 7629100. The archived webcast replay will be available on the Company’s website for one year.

1

FINANCIAL REVIEW

Operations

Operating loss from Galena’s development programs and general and administrative expenses, classified as continuing operations, during the three months ended September 30, 2016 was $6.5 million, including $0.5 million in non-cash stock-based compensation, compared to an operating loss from continuing operations of $8.6 million, including $0.6 million in non-cash stock-based compensation for the same period in 2015. Operating loss for the first nine months of 2016 was $24.7 million, including $1.8 million in non-cash stock-based compensation, compared to an operating loss from continuing operations of $26.6 million, including $1.3 million in non-cash stock-based compensation for the same period in 2015.

Loss from continuing operations for Q3 2016 was $4.3 million, or $0.02 per basic and diluted share, including $2.1 million in non-operating income. Loss from continuing operations for Q3 2015 was $6.4 million, or $0.04 per basic and diluted share, including $2.3 million non-operating income. Loss from continuing operations for the first nine months of 2016 was $9.2 million, or $0.05 per basic and diluted share, including $15.6 million in non-operating income. Loss from continuing operations for the first nine months of 2015 was $28.2 million, or $0.18 per basic and diluted share, including $1.5 million in non-operating expense.

The net non-operating income for the three months ended September 30, 2016 was largely due to a $3.7 million gain from the significant decrease in the estimated fair value of warrants accounted for as liabilities driven by the decline in Galena’s common stock price. The net non-operating income for the nine months ended September 30, 2016 was largely due to $14.2 million and $5.2 million gains from the significant decreases in the estimated fair value of warrants accounting for as liabilities and the contingent purchase price liability related to NeuVax given the decision to close the PRESENT study, respectively. The gain realized from the decrease in these two liabilities was partially offset by $1.4 million and $2.0 million of interest expense for the three and nine months ended September 30, 2016. The changes in the estimated fair value of warrants accounted for as liabilities and the contingent purchase price liability are reflected as non-cash gains and losses in the consolidated financial statements. Management believes the most relevant measure of our performance is operating loss.

Loss from discontinued operations from Galena’s former commercial business for Q3 2016 was $2.6 million, or $0.01 per basic and diluted share, compared to $11.7 million, or $0.07 per basic and diluted share, for the same period of 2015. Loss from discontinued operations for the first nine months of 2016 was $8.9 million, or $0.05 per basic and diluted share, compared to $16.1 million, or $0.11 per basic and diluted share, for the same period of 2015. The three and nine months ended September 30, 2015 include a one-time non-cash impairment charge of $8.1 million from the former commercial business being classified as held for sale.

Net loss for Q3 2016 was $6.9 million, or $0.03 per basic and diluted share, compared to net loss of $18.0 million, or $0.11 per basic and diluted share, for the same period of 2015. Net loss for the first nine months of 2016 was $18.0 million, or $0.10 per basic and diluted share, compared to $44.2 million, or $0.29 per basic and diluted share, for the same period of 2015.

2

Cash and Cash Equivalents

Galena had cash and cash equivalents of approximately $24.5 million as of September 30, 2016, compared with $29.7 million as of December 31, 2015. The decrease of approximately $5.2 million in cash and cash equivalents from December 31, 2015 to September 30, 2016 was attributable primarily to $36.9 million used in operating activities, $1.1 million in selling expenses related to the sale of the Company’s commercial products, and $4.8 million in payments on long-term debt. The decrease was partially offset by $31.8 million in net proceeds from issuance of common stock and warrants to purchase common stock in offerings, and $5.1 million becoming immediately available to the Company from amending our long-term debt to reduce restricted cash. As of September 30, 2016, Galena had $18.9 million of restricted cash including $18.5 million restricted as a minimum cash covenant for our Debenture, the minimum cash covenant being the lesser of $18.5 million or the outstanding balance of the Debenture.

THIRD QUARTER AND RECENT ACTIVITIES

Clinical Development

Presented GALE-301/GALE-302 Phase 1b Data
On October 20, 2016, a podium presentation was delivered on Galena’s GALE-301 and GALE-302 clinical program at the American College of Surgeons Clinical Congress 2016. The Phase 1b is a single-center, randomized, single-blinded, three-arm study in patients with breast or ovarian cancer diagnosis who were treated with standard of care and were without evidence of disease. This trial augments the Phase 1/2a trial with single-agent GALE-301 in ovarian and endometrial cancers. The presentation was entitled, "A Phase Ib Trial Comparing Different Doses/Schedules of a Folate Binding Protein (FBP)-derived Peptide Vaccine, E39, and its Attenuated Version, E39’, to Induce Long-term FBP-specific Immunity in Disease-free Cancer Patients." In this trial, which enrolled mostly breast cancer patients, who have lower FBP exposure than ovarian patients, the 500mcg dose appears to provide a more optimal immunological response. This differs from the results in ovarian cancer patients, who have much higher FBP expression, with potential secondary immune tolerance, where 1000mcg was the optimal dose. However, E39’ (GALE-302) given after E39 (GALE-301) was able to induce long-term immunity in both dosing cohorts, underscoring the potential importance of attenuated peptides in relatively antigen-naïve patients.

Presented NeuVax plus Trastuzumab Interim Safety Data
On October 10, 2016, Galena presented interim safety data from the NeuVax Phase 2b combination study with trastuzumab at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) 2016. The clinical trial is a randomized, multicenter, investigator-sponsored, 300 patient Phase 2b study enrolling HER2 1+ and 2+ node positive, and high-risk node negative patients. The poster, entitled, "Interim safety analysis of a phase II trial combining trastuzumab and NeuVax, a HER2-targeted peptide vaccine, to prevent breast cancer recurrence in HER2 low expression," demonstrated that this novel combination of trastuzumab and NeuVax in HER2 low-expressing (LE) patients is well-tolerated and the cardiac effects of trastuzumab are not impacted by the addition of NeuVax.

Presented GALE-301 FBP Expression Data
On September 27, 2016, data was presented on the association between clinical outcomes and folate binding protein (FBP) expression from our GALE-301 Phase 1/2a clinical trial at the CRI-CIMT-EATI-AACR International Cancer Immunotherapy Conference (CIMT) (Free CIMT Whitepaper). The poster, entitled, "Improved disease-free survival in endometrial and ovarian cancer patients with low folate binding protein expression after treatment with the E39 peptide vaccine in a phase I/IIa trial," reported clinical outcomes based on FBP expression level. The data revealed a disease free survival (DFS) benefit in patients with low FBP expression (FBPlo), but not in patients with high FBP expression (FBPhi).

3

Presented Preclinical NeuVax data in Ovarian and Pancreatic Cancer
On September 13, 2016, preclinical NeuVax data was presented at the Progress in Vaccination Against Cancer (PIVAC) Conference. NeuVax contains the immunodominant peptide derived from the extracellular region of the HER2 protein, which is expressed in ovarian and pancreatic cancers as well as in breast cancer. The poster, entitled, "Preclinical study on the efficacy of NeuVax peptide vaccine against human Her2+/ HLA-A2.1+ ovarian and pancreatic cancer," demonstrated the results of HLA-A2 transgenic mice that were immunized with NeuVax (E75) mixed with recombinant mouse GM-CSF (NeuVax mice). Administration of the NeuVax vaccination resulted in a specific, delayed-type hypersensitivity (DTH) reaction and in the induction of E75 specific CD8+ T cells that express PD-1 (programmed T-cell death protein). Both ovarian and pancreatic tumor growth rate was significantly reduced in NSG mice that received the CD8+ T cells from NeuVax-immunized mice compared to those receiving CD8+ T cells from control mice. Additionally, the expression of PD-1 on activated CD8+ T cells suggests an opportunity to investigate the efficacy of NeuVax in combination with PD-1 inhibitors.

Expanded GALE-401 Intellectual Property Protection with Patent Issuance in Japan
On September 12, 2016, GALE-401 was issued a second Japanese Patent (JP Patent #5985719) containing composition and method of use claims for GALE-401, anagrelide controlled release. The patent covers the treatment of patients suffering from myeloproliferative diseases, including myeloproliferative neoplasms (MPNs) such as essential thrombocythemia (ET) and polycythemia vera. The patent provides GALE-401 exclusivity until 2029, not including any patent term extensions.

Corporate

Appointed a new Chief Financial Officer
On November 3, 2016, Stephen F. Ghiglieri was appointed as the Company’s Executive Vice President and Chief Financial Officer. Mr. Ghiglieri has more than 30 years in senior level finance and operations roles at both biotechnology and technology companies. Prior to Galena Biopharma, Mr. Ghiglieri served as CFO of MedData Inc., a private equity backed healthcare services company that was sold to Mednax, a publicly traded national medical group. Previously, he spent nearly 10 years at NeurogesX, ending his tenure as the Company’s Executive Vice President, Chief Operating Officer, and CFO. Prior to that he served as the CFO of Hansen Medical, Inc., a medical device company. He also held senior level finance positions at two other healthcare companies: Oacis Healthcare Systems, Inc., and Oclassen Pharmaceuticals, Inc. Additionally, he was also the CFO and Corporate Secretary for two technology software companies: Avolent, Inc., and Andromedia, Inc. Mr. Ghiglieri began his career as an audit manager of PricewaterhouseCoopers, LLP. He received a Bachelor of Science in Business Administration from California State University, Hayward where he graduated Magna Cum Laude. Mr. Ghiglieri is also a Certified Public Accountant (inactive).

Announced a Reverse Stock Split
On October 31, 2016, the Company announced a Reverse Stock Split of its shares of common stock at a ratio of 1-for-20 following the approval by the Company’s Board of Directors. The reverse stock split was authorized by the Company’s stockholders at the Special Meeting of Stockholders held on October 21, 2016. The reverse stock split will become effective on November 11, 2016 and the Company’s common stock will commence trading on a split-adjusted basis when the market opens on Monday, November 14, 2016. The Company’s common stock will continue to trade on the NASDAQ Capital Market under the symbol "GALE" but will trade under the new CUSIP number 363256504.

Closed a Registered Direct Equity Offering
On July 13, 2016, Galena closed a registered direct equity offering of common stock and warrants. The net proceeds to the Company were approximately $11.7 million.

4

GALENA BIOPHARMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(Amounts in thousands, except share and per share data)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2016

2015

2016

2015
Operating expenses:

Research and development
$
3,624

$
5,740

$
15,242

$
18,762

General and administrative
2,848

2,895

9,490

7,869

Total operating expenses
6,472

8,635

24,732

26,631

Operating loss
(6,472
)

(8,635
)

(24,732
)

(26,631
)
Non-operating income (expense):

Litigation settlements
—

—

(1,800
)

—

Change in fair value of warrants potentially settleable in cash
3,652

2,134

14,172

(981
)
Interest expense, net
(1,377
)

(158
)

(1,988
)

(607
)
Change in fair value of the contingent purchase price liability
(145
)

307

5,182

69

Total non-operating income (expense), net
2,130

2,283

15,566

(1,519
)
Loss from continuing operations
$
(4,342
)

$
(6,352
)

$
(9,166
)

$
(28,150
)
Discontinued operations

Loss from discontinued operations

(2,587
)

(11,674
)

(8,867
)

(16,074
)
Net loss
$
(6,929
)

$
(18,026
)

$
(18,033
)

$
(44,224
)
Net loss per common share:

Basic and diluted net loss per share, continuing operations
$
(0.02
)

$
(0.04
)

$
(0.05
)

$
(0.18
)
Basic and diluted net loss per share, discontinued operations
$
(0.01
)

$
(0.07
)

$
(0.05
)

$
(0.11
)
Basic and diluted net loss per share
$
(0.03
)

$
(0.11
)

$
(0.10
)

$
(0.29
)
Weighted-average common shares outstanding: basic and diluted
209,303,286

161,857,522

190,306,319

153,000,857

5

GALENA BIOPHARMA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(Amounts in thousands)

September 30, 2016

December 31, 2015
ASSETS

Current assets:

Cash and cash equivalents
$
24,514

$
29,730

Restricted cash
18,901

401

Litigation settlement insurance recovery
—

21,700

Prepaid expenses and other current assets
1,043

1,398

Current assets of discontinued operations
—

392

Total current assets
44,458

53,621

Equipment and furnishings, net
226

335

In-process research and development
12,864

12,864

GALE-401 rights
9,255

9,255

Goodwill
5,898

5,898

Deposits
145

171

Total assets
$
72,846

$
82,144

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable
$
894

$
1,597

Accrued expense and other current liabilities
3,819

5,292

Litigation settlement payable
—

25,000

Fair value of warrants potentially settleable in cash
9,908

14,518

Current portion of long-term debt
23,722

4,739

Current liabilities of discontinued operations
4,195

5,925

Total current liabilities
42,538

57,071

Deferred tax liability, non-current
5,418

5,418

Contingent purchase price consideration, net of current portion
960

6,142

Total liabilities
48,916

68,631

Stockholders’ equity
23,930

13,513

Total liabilities and stockholders’ equity
$
72,846

$
82,144

On November 9, 2016 Kite Pharma, Inc. (Nasdaq: KITE), a clinical-stage biopharmaceutical company focused on developing engineered autologous cell therapy (eACT) products for the treatment of cancer, reported financial results for the third quarter 2016 and recent business highlights (Press release, Kite Pharma, NOV 9, 2016, View Source [SID1234516569]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Kite also announced that it has met with the U.S. Food and Drug Administration (FDA) to discuss the company’s plans to submit the Biologics License Application (BLA) for KTE-C19. Kite currently intends to file for the broader label of aggressive non-Hodgkin lymphoma, which includes chemorefractory diffuse large B-cell lymphoma (DLBCL), transformed follicular lymphoma (TFL), and primary mediastinal B-cell lymphoma (PMBCL). The BLA submission will be based on the primary analysis of the ZUMA-1 pivotal trial. Kite plans to initiate the rolling submission of the BLA for accelerated approval of KTE-C19 by the end of December 2016 with a targeted completion by the end of the first quarter 2017 and a potential approval and commercial launch of KTE-C19 in 2017.

"We are making history with each step we take toward bringing engineered T-cell therapy to patients. We are very pleased with the outcome from our productive discussions with the FDA and their willingness to partner with us to advance this innovative therapy," said Arie Belldegrun, M.D., FACS, Chairman, President, and Chief Executive Officer. "We will focus on initiating and finalizing the submission based on the FDA feedback and look ahead to the potential approval of KTE-C19 in 2017."

Third Quarter 2016 and Recent Highlights

Reported positive topline results from the pre-planned interim analysis in the KTE-C19 ZUMA-1 pivotal trial in patients with aggressive non-Hodgkin lymphoma, which includes chemorefractory DLBCL (n=51), and TFL and PMBCL (n=11). The study met the pre-specified response endpoint with an objective response rate of 76 percent in DLBCL (Cohort 1). Thirty nine percent of patients maintained complete response at three-month follow up. Grade 3 or higher cytokine release syndrome (CRS) and neurological toxicity was observed in 18 percent and 34 percent of patients, respectively. Treatment emergent Grade 5 events were observed in 3 percent of patients.
Reported ongoing complete responses in three of seven patients at the 12-month follow-up in the Phase 1 portion of the ZUMA-1 study of KTE-C19 in chemorefractory DLBCL at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper).
Announced planned oral and poster presentations of KTE-C19 clinical and manufacturing data at the 2016 annual meeting of the American Society of Hematology (ASH) (Free ASH Whitepaper). The presentations will include additional clinical data from the interim analysis of the ZUMA-1 pivotal trial as well as clinical and manufacturing data from the ZUMA-3 and ZUMA-4 clinical studies in adult acute lymphoblastic leukemia (ALL) and pediatric ALL, respectively. Preliminary results from a clinical study of a fully human anti-CD19 chimeric antigen receptor (CAR) conducted at the National Cancer Institute will also be shared in an oral presentation.
Initiated patient enrollment in a Phase 1b/2 combination study of KTE-C19 and atezolizumab, Genentech’s anti-PD-L1 monoclonal antibody. This is the first combination study of an anti-CD19 engineered CAR T-cell and a checkpoint inhibitor.
At the Kite investor day on October 18, 2016:
Detailed manufacturing and commercial preparations for potential KTE-C19 commercial launch;
Outlined KTE-C19 expansion studies with the potential to deliver six additional indications in B-cell malignancies;
Announced the expansion of Kite’s T-cell receptor (TCR) and CAR T development pipeline with four new INDs planned in the 2016-2018 timeframe; and
Presented "T cells 2.0" next-generation cell programming technologies to realize the full potential of engineered T-cell therapy.
Licensed multiple neoantigen directed TCR product candidates to treat solid tumors expressing mutated KRAS antigens from the National Institutes of Health.
Third Quarter 2016 Financial Results

Revenue was $7.3 million for the third quarter of 2016.
Research and development expenses were $57.3 million for the third quarter of 2016, and includes $8.9 million of non-cash stock-based compensation expense.
General and administrative expenses were $25.0 million for the third quarter of 2016, and includes $10.3 million of non-cash stock-based compensation expense.
Net loss attributable to common stockholders was $73.9 million, or $1.49 per share, for the third quarter of 2016.
Non-GAAP net loss attributable to common stockholders for the third quarter of 2016 was $54.7 million, or $1.10 per share, which excludes non-cash stock-based compensation expense of $19.3 million.
Cash burn for the third quarter was $54.0 million. It is expected that the company’s cash, cash equivalents, and marketable securities of $477.1 million as of September 30, 2016 will be sufficient to fund its current operations, including planned clinical development programs, through the first half of 2018.
About Kite Pharma

Kite Pharma, Inc., is a clinical-stage biopharmaceutical company engaged in the development of novel cancer immunotherapy products, with a primary focus on engineered autologous cell therapy (eACT) designed to restore the immune system’s ability to recognize and eradicate tumors. Kite is based in Santa Monica, CA. For more information on Kite Pharma, please visit www.kitepharma.com. Sign up to follow @KitePharma on Twitter at View Source

Cautionary Note on Forward-Looking Statements

This press release contains forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The press release may, in some cases, use terms such as "predicts," "believes," "potential," "proposed," "continue," "estimates," "anticipates," "expects," "expected," "plans," "intends," "may," "could," "might," "will," "should" or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Forward-looking statements include statements regarding intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things: the ability and timing of obtaining KTE-C19 data, initiating and completing a submission of the BLA for KTE-C19 with the FDA, obtaining regulatory approval based on the studies of KTE-C19, commercially launching KTE-C19, researching and developing additional product candidates, expectations regarding the clinical effectiveness and safety of KTE-C19 and the sufficiency of Kite’s cash, cash equivalents and marketable securities. Various factors may cause differences between Kite’s expectations and actual results as discussed in greater detail in Kite’s filings with the Securities and Exchange Commission, including without limitation in its Form 10-Q for the quarter ended September 30, 2016. Any forward-looking statements that are made in this press release speak only as of the date of this press release. Kite assumes no obligation to update the forward-looking statements whether as a result of new information, future events or otherwise, after the date of this press release.

On November 9, 2016 Keryx Biopharmaceuticals, Inc. (Nasdaq:KERX), a biopharmaceutical company focused on bringing innovative medicines to people with renal disease, reported its financial results for the third quarter ended September 30, 2016 and provided a corporate update (Press release, Keryx Biopharmaceuticals, NOV 9, 2016, View Source;p=RssLanding&cat=news&id=2220890 [SID1234516568]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"Our second contract manufacturer is successfully producing Auryxia," said Greg Madison, president and chief executive officer of Keryx Biopharmaceuticals. "We are ready to promptly make Auryxia available to pharmacies, pending approval of this manufacturer, which has a November 13, 2016 PDUFA date. Since August, we have been working closely with the kidney community to support them through the supply interruption. We are committed to maintaining a consistent supply of Auryxia, and we are working to ensure that the renal care teams will confidently prescribe Auryxia again."

BUSINESS UPDATE

The company reported Auryxia net U.S. product sales for the third quarter of 2016 of $5.1 million compared to $3.2 million in the third quarter of 2015. Third quarter 2016 product sales reflect approximately 9,700 reported prescriptions of Auryxia during the period. In addition, Keryx announced it will change its method of revenue recognition from the sell-through (deferred) method to the pull-through (ex-factory) method beginning in the fourth quarter of 2016.
On August 1, 2016, Keryx announced a temporary interruption in the supply of Auryxia was imminent due to a production-related issue at its existing manufacturer in converting active pharmaceutical ingredient (API) to finished drug product. Keryx is working with its existing manufacturer to resolve the issue and resume production. Keryx filed a post-approval supplement application with the U.S. FDA for approval of a second contract manufacturer to supply finished drug product. The application has a Prescription Drug User Fee Act, or PDUFA, action date of November 13, 2016. The company is prepared to promptly supply Auryxia to pharmacies, pending FDA approval of its second contract manufacturer. In October 2016, Keryx entered into a long-term agreement with its second contract manufacturer for the manufacture of commercial supply of finished drug product.
Keryx announced that it has completed the sNDA seeking an additional indication for the treatment of iron deficiency anemia in adults with stage 3-5 non-dialysis dependent chronic kidney disease (CKD), and is ready to submit the application to the FDA, pending final agreement on its pediatric plan.
Five abstracts related to ferric citrate have been accepted for poster presentation at the upcoming American Society of Nephrology’s (ASN) 2016 Kidney Week taking place November 15 – 20, 2016. Four of the five abstracts describe data from the pivotal Phase 3 trial evaluating ferric citrate for the treatment of iron deficiency anemia in adults with stage 3-5 non-dialysis dependent CKD. The accepted abstracts are available online on the ASN conference website. In addition, the company plans to submit Phase 3 results for publication in a peer reviewed medical journal.
FINANCIAL SECTION

Third Quarter Ended September 30, 2016 Financial Results
"In the third quarter, we focused on rebuilding supply of Auryxia while at the same time continuing to invest appropriately in future growth areas, including pre-launch activities for the potential label expansion of ferric citrate for the treatment of adults with IDA and stage 3-5 NDD-CKD," said Scott Holmes, chief financial officer of Keryx. "As we look ahead, we will be focused on how quickly we can return Auryxia to patients who had previously been prescribed our medicine, and on bringing Auryxia to new patients who could potentially benefit from treatment."

At September 30, 2016, the company had cash and cash equivalents of $132.2 million.

Total revenues for the quarter ended September 30, 2016 were approximately $6.3 million, compared with $4.2 million during the same period in 2015. Total revenues for the third quarter of 2016 consisted of Auryxia net U.S. product sales of $5.1 million, and license revenue of $1.3 million associated with royalties received on ferric citrate net sales from Keryx’s Japanese partner. Beginning in the fourth quarter of 2016, the company will change its revenue recognition policy from the sell-through method based on patient prescription fulfillments to the pull-through or ex-factory method based on sales of Auryxia to wholesalers and pharmacy customers. This decision was made following the company’s ability to reasonably estimate product returns. Under the ex-factory method, revenue will be recognized when wholesalers and direct customers receive orders of Auryxia.

Cost of goods sold for the quarter ended September 30, 2016 was $18.2 million as compared with $3.1 million during the same period in 2015. Cost of goods sold during the third quarter of 2016 included $13.8 million in write-offs of work-in-process inventory that was determined to no longer be suitable for commercial manufacture. Additionally, cost of goods sold during the quarter also included $2.3 million related to manufacturing charges incurred as a result of not fully utilizing planned production at the company’s existing third-party drug product manufacturer.

Research and development expenses for the quarter ended September 30, 2016 decreased by 22 percent to $8.7 million as compared to $11.2 million during the same period in 2015. The decrease was primarily due to a reduction in clinical expenses associated with the company’s completed Phase 3 clinical trial evaluating ferric citrate for the treatment of IDA in adults with stage 3-5 non-dialysis dependent CKD.

Selling, general and administrative expenses for the quarter ended September 30, 2016 were $20.5 million as compared with $20.2 million during the same period in 2015.

Net loss for the third quarter ended September 30, 2016 was $41.7 million, or $0.39 per share, compared to a net loss of $30.7 million, or $0.29 per share, for the comparable quarter in 2015.

On November 9, 2016 Juno Therapeutics, Inc. (NASDAQ: JUNO), a biopharmaceutical company focused on re-engaging the body’s immune system to revolutionize the treatment of cancer, reported financial results and business highlights for the third quarter 2016 (Press release, Juno, NOV 9, 2016, View Source;p=RssLanding&cat=news&id=2221123 [SID1234516567]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"JCAR017, a key product candidate of our CD19 platform, has shown encouraging preliminary efficacy and safety results in NHL and pediatric ALL. At the upcoming American Society of Hematology (ASH) (Free ASH Whitepaper) meeting, additional data from our Phase I trial for JCAR017 in NHL patients will be presented," said Hans Bishop, Juno’s President and Chief Executive Officer. "Progress with CAR T therapy continues as we strive to bring these innovative product candidates to patients battling cancer. We look forward to the upcoming presentations at ASH (Free ASH Whitepaper), including 11 total presentations from a number of ongoing and completed studies."

Third Quarter 2016 and Recent Corporate Highlights
Clinical Update:

CD19 Portfolio:
Announced seven oral and four poster presentations at the 58th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting, detailing updated clinical and preclinical results generated in partnership with its collaborators. New data with JCAR017 in adult patients with relapsed/refractory (r/r) diffuse large B-cell lymphoma (DLBCL), which is a subtype of non-Hodgkin lymphoma (NHL), data from the PLAT-02 trial for pediatric patients with r/r acute lymphoblastic leukemia (ALL), and data from a Phase I trial with JCAR014 in high-risk, ibrutinib-refractory patients with chronic lymphocytic leukemia (CLL) will be presented.

JCAR015
Announced the removal on July 12, 2016 by the U.S. FDA of a clinical hold that the agency had placed on the Phase II ROCKET trial on July 6, 2016. The ROCKET trial has reopened for enrollment using JCAR015 with cyclophosphamide (cy) preconditioning alone, and all sites are currently treating patients. Juno’s trials and plans for its other CD19-directed CAR T cell product candidates, including JCAR017, were not affected.

JCAR017
Announced Phase I NHL preliminary efficacy and safety data for the ongoing trial. Juno will update results with more patients and durability data at the ASH (Free ASH Whitepaper) Annual Meeting.

JCAR014
Researchers at the Fred Hutchinson Cancer Research Center (FHCRC) published clinical data in Science Translational Medicine demonstrating that patients who received a dose of CD19-targeted defined composition engineered T cells after chemotherapy went into complete remission. By controlling the mixture of T cells that patients receive, the researchers can see relationships between cell doses and patient outcomes that were previously elusive. The data also suggest that with a defined one-to-one composition of cells, efficacy of treatment is increased, while toxic side effects are decreased. Like JCAR014, JCAR017 uses a one-to-one ratio of helper and killer CAR T cells, and Juno believes it has the potential to be a "best-in-class" treatment for r/r NHL, r/r CLL, and adult and pediatric r/r ALL.

Corporate Development News:
Juno entered into an exclusive license agreement with Memorial Sloan Kettering Cancer Center (MSK) and Eureka Therapeutics, Inc. for a novel, fully-human binding domain targeting B-cell maturation antigen (BCMA), along with antibodies against two additional undisclosed multiple myeloma targets to be used for the potential development and commercialization of CAR cell therapies for patients with multiple myeloma. MSK and Eureka Therapeutics received an undisclosed upfront payment and are eligible to receive additional payments upon the achievement of undisclosed clinical, regulatory, and commercial milestones, and royalties on net sales. The parties expect the BCMA CAR to enter human testing as early as the first half of 2017.

Juno acquired RedoxTherapies, a privately-held company. The acquisition provides Juno with an exclusive license to vipadenant, a small molecule adenosine A2a receptor antagonist that has the potential to disrupt important immunosuppressive pathways in the tumor microenvironment in certain cancers. Juno intends to explore this molecule in combination with its engineered T cell platform and may over time explore it in other areas as well. The upfront consideration for the RedoxTherapies acquisition was $10.0 million in cash. The seller is also eligible to receive payments upon the achievement of clinical, regulatory, and commercial milestones.

Third Quarter 2016 Financial Results
Cash Position: Cash, cash equivalents, and marketable securities as of September 30, 2016 were $1.04 billion compared to $1.11 billion as of June 30, 2016 and $1.22 billion as of December 31, 2015.

Cash Burn: Excluding cash inflows and outflows from upfront payments related to business development, cash burn in the third quarter of 2016 was $59.5 million including $6.4 million for the purchase of property and equipment, compared to $45.7 million in the third quarter of 2015 including $14.2 million for the purchase of property and equipment. The cash burn increase of $13.8 million was primarily driven by cash outflows in connection with the overall growth of the business, offset by $9.2 million received from Celgene in the third quarter of 2016 for reimbursement of costs incurred by Juno in connection with the CD19 program and by lower spend for property and equipment.

Revenue: Revenue for the three and nine months ended September 30, 2016 was $20.8 million and $58.2 million, respectively, compared to $1.6 million and $14.1 million for the three and nine months ended September 30, 2015, respectively. The increase of $19.2 million and $44.1 million in the three and nine months ended September 30, 2016, respectively, was due primarily to revenue recognized in connection with the Celgene collaboration and CD19 opt-in. Included in revenue for the nine months ended September 30, 2016 and 2015 was $14.3 million and $12.3 million received in connection with the Novartis sublicense agreement, respectively.

R&D Expenses: Research and development expenses for the three and nine months ended September 30, 2016, inclusive of non-cash expenses and computed in accordance with GAAP, were $60.9 million and $206.9 million, respectively, compared to $11.5 million and $129.5 million for the same periods in 2015. The increases in 2016 were primarily due to increased costs incurred to execute Juno’s clinical development strategy, manufacture its product candidates, and expand its overall research and development capabilities, milestones achieved in 2016, an increase in stock-based compensation expense, and the difference between the three months ended September 30, 2016 and 2015 in the gain related to Juno’s estimated success payment liability. These increases were offset by lower upfront payments for technology acquisition in 2016 compared with 2015, a gain recognized during the nine months ended September 30, 2016 related to the change in the estimated value of Juno’s contingent consideration liabilities, and the difference between the nine months ended September 30, 2016 and 2015 in the gain or expense related to Juno’s estimated success payment liability. For the three months ended September 30, 2016 and 2015, Juno recorded a gain of $17.7 million and $25.6 million, respectively, related to Juno’s success payment liability, resulting in an increase in research and development expense of $7.9 million. For the nine months ended September 30, 2016, Juno recorded a gain of $20.8 million related to Juno’s success payment liability, compared to an expense of $17.3 million for the same period in 2015, resulting in a decrease of $38.1 million in research and development expense.

Non-GAAP R&D Expenses: Non-GAAP research and development expenses for the three and nine months ended September 30, 2016 were $62.2 million and $214.5 million, respectively, compared to $34.5 million and $75.4 million for the same periods in 2015. Non-GAAP research and development expenses for the three and nine months ended September 30, 2016 include $7.9 million and $25.8 million of stock-based compensation expense, respectively, compared to $3.1 million and $7.3 million for the same periods in 2015. Non-GAAP research and development expenses in 2016 exclude the following:

A gain of $17.7 million and $20.8 million for the three and nine months ended September 30, 2016, respectively, associated with the change in the estimated fair value and elapsed service period for Juno’s potential success payment liabilities to FHCRC and MSK.
Non-cash stock-based compensation expense of $0.9 million and $3.3 million for the three and nine months ended September 30, 2016, respectively, related to a 2013 restricted stock award to a co-founding director that became a consultant upon his departure from Juno’s board of directors in 2014.

An expense of $0.3 million for the three months ended September 30, 2016 and a gain of $5.2 million for the nine months ended September 30, 2016 associated with the change in the estimated fair value of the contingent consideration liabilities recorded in connection with the Stage and X-Body acquisitions.

Upfront payments related to technology licensing and the RedoxTherapies acquisition of $15.0 million for the three and nine months ended September 30, 2016.

Non-GAAP research and development expenses in 2015 exclude the following:
A gain of $25.6 million for the three months ended September 30, 2015 and expense of $17.3 million for the nine months ended September 30, 2015 associated with the change in estimated fair value and elapsed accrual period for Juno’s potential success payment liabilities to FHCRC and MSK.

Non-cash stock-based compensation expense of $1.3 million and $4.8 million for the three and nine months ended September 30, 2015, respectively, related to a 2013 restricted stock award to a co-founding director that became a consultant upon his departure from Juno’s board of directors in 2014.

An expense of $1.3 million and $1.2 million for the three and nine months ended September 30, 2015, respectively, associated with the change in the estimated fair value of the contingent consideration liabilities recorded in connection with the Stage and X-Body acquisitions.

Upfront payments related to license agreements of $30.8 million for the nine months ended September 30, 2015 associated with the Editas and Fate Therapeutics collaborations.

G&A Expenses: General and administrative expenses on a GAAP basis for the three and nine months ended September 30, 2016 were $18.4 million and $51.2 million, respectively, compared to $13.6 million and $41.2 million for the same periods in 2015. The increase in the third quarter of 2016 compared to the same period in 2015 was primarily due to an increase in litigation and patent legal costs, consulting costs related to commercial readiness, and personnel costs, including non-cash stock-based compensation expense. These were offset by a decrease in costs supporting business development activities. The increase in the nine months ended September 30, 2016 compared to the same period in 2015 was primarily due to increased personnel costs, including non-cash stock-based compensation expense and consulting costs related to commercial readiness, offset by lower costs supporting business development activities and lower litigation costs. General and administrative expenses include $5.4 million and $15.9 million of non-cash stock-based compensation expense for the three and nine months ended September 30, 2016, respectively, compared to $4.7 million and $9.4 million for the same periods in 2015.

GAAP Net Loss: Net loss for the three and nine months ended September 30, 2016 was $56.9 million, or $0.56 per share, and $192.8 million, or $1.91 per share, respectively, compared to $23.2 million, or $0.26 per share and $154.2 million, or $1.80 per share for the same periods in 2015.

Non-GAAP Net Loss: Non-GAAP net loss, which incorporates the non-GAAP R&D expense, for the three and nine months ended September 30, 2016 was $58.3 million, or $0.57 per share, and $200.4 million, or $1.99 per share, respectively, compared to $46.3 million, or $0.52 per share, and $100.0 million, or $1.17 per share, respectively, for the same periods in 2015.
A reconciliation of GAAP net loss to non-GAAP net loss is presented below under "Non-GAAP Financial Measures."

2016 Financial Guidance Reaffirmed
Juno reaffirms 2016 cash burn guidance, excluding cash inflows or outflows from upfront payments related to business development activities, of between $220 million and $250 million.

Operating burn estimated to be between $170 million and $195 million.
Capital expenditures estimated to be between $40 million and $55 million, the vast majority of which are related to one-time infrastructure build-outs.

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.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"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.