On August 4, 2016 Lexicon Pharmaceuticals, Inc. (Nasdaq: LXRX), reported financial results for the second quarter ended June 30, 2016 and provided an overview of key milestones for the company’s lead drug candidates (Filing, Q2, Lexicon Pharmaceuticals, 2016, AUG 4, 2016, View Source [SID:1234514319]).

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"We enter the second half of the year with significant momentum, with both telotristat etiprate and sotagliflozin," said Lexicon President and Chief Executive Officer, Lonnel Coats. "We are looking forward to our upcoming PDUFA date of November 30 for telotristat etiprate, as well as top-line data from two pivotal Phase 3 clinical trials and two Phase 2 clinical trials for sotagliflozin in type 1 diabetes by the end of the year."

Pipeline Progress

Telotristat etiprate is the first investigational drug in clinical studies to target tryptophan hydroxylase (TPH), the rate-limiting enzyme involved in serotonin production. Excess production of serotonin within metastatic neuroendocrine tumor cells can lead to carcinoid syndrome, a condition characterized by serious consequences including frequent and debilitating diarrhea, facial flushing, abdominal pain, and heart valve damage.

On May 30, 2016, Lexicon announced that the U.S. Food and Drug Administration had granted a Priority Review of the NDA filing for telotristat etiprate and set a Prescription Drug User Fee Act ("PDUFA") target action date of November 30, 2016. In addition, the European Medicines Agency recently accepted a marketing authorization application filed for telotristat etiprate by Ipsen. Lexicon previously entered into a collaboration with Ipsen to commercialize telotristat etiprate in Europe and other countries outside the U.S. and Japan.

Sotagliflozin, which is being developed as a potential treatment for type 1 and type 2 diabetes, is a dual inhibitor of sodium-glucose transporters 1 and 2 (SGLT1 and SGLT2), each of which modulates glucose levels, and is the first investigational medicine to target both of these two proteins.

Lexicon is conducting three Phase 3 clinical trials of sotagliflozin in patients with type 1 diabetes, two of which have completed enrollment and are expected to provide top-line results in the second half of 2016. Lexicon expects that Phase 3 development of sotagliflozin in patients with type 2 diabetes will be initiated by Sanofi by the end of 2016. Lexicon previously entered into a collaboration with Sanofi in which Lexicon is responsible for clinical development activities relating to type 1 diabetes and Sanofi is responsible for clinical development activities relating to type 2 diabetes.

Financial Highlights

Revenues: Lexicon’s revenues for the three months ended June 30, 2016 increased to $20.1 million from $0.4 million for the corresponding period in 2015, primarily due to revenues recognized from the collaboration and license agreement with Sanofi. For the six months ended June 30, 2016, revenues increased to $32.6 million from $2.2 million for the corresponding period in 2015.

Research and Development Expenses: Research and development expenses for the three months ended June 30, 2016 increased 132 percent to $48.2 million from $20.8 million for the corresponding period in 2015, primarily due to increases in external clinical and nonclinical research and development costs. For the six months ended June 30, 2016, research and development expenses increased 105 percent to $85.2 million from $41.6 million for the corresponding period in 2015.

Change in Fair Value of Symphony Icon Purchase Liability: In connection with the acquisition of Symphony Icon, Lexicon made an initial estimate of the fair value of the liability for the associated base and contingent payments. Changes in this liability, based on the development of the programs and the time until such payments are expected to be made, are recorded in Lexicon’s consolidated statements of operations. The change in fair value of the Symphony Icon purchase liability was $0.5 million and ($12,000) for the three months ended June 30, 2016 and 2015, respectively, and was $1.4 million and $1.7 million for the six months ended June 30, 2016 and 2015, respectively.

General and Administrative Expenses: General and administrative expenses for the three months ended June 30, 2016 increased 33 percent to $8.4 million from $6.3 million for the corresponding period in 2015, primarily due to increased costs in preparation for commercialization of telotristat etiprate. For the six months ended June 30, 2016, general and administrative expenses increased 40 percent to $16.8 million from $12.0 million for the corresponding period in 2015.

Consolidated Net Loss: Net loss for the three months ended June 30, 2016 was $38.1 million, or $0.37 per share, compared to a net loss of $28.1 million, or $0.27 per share, in the corresponding period in 2015. Net loss for the six months ended June 30, 2016 was $73.0 million, or $0.70 per share, compared to a net loss of $56.2 million, or $0.54 per share, in the corresponding period in 2015. For the three and six months ended June 30, 2016, net loss included non-cash, stock-based compensation expense of $2.0 million and $3.8 million, respectively. For the three and six months ended June 30, 2015, net loss included non-cash, stock-based compensation expense of $1.8 million and $3.7 million, respectively.

Cash and Investments: As of June 30, 2016, Lexicon had $429.4 million in cash and investments, as compared to $477.1 million as of March 31, 2016 and $521.4 million as of December 31, 2015.

On August 4, 2016 Karyopharm Therapeutics Inc. (Nasdaq:KPTI), a clinical-stage pharmaceutical company, reported financial results for the second quarter 2016 and commented on recent accomplishments and clinical development plans for its lead, novel, oral Selective Inhibitor of Nuclear Export (SINE) compound selinexor (KPT-330), and other pipeline assets, including KPT-8602, its second-generation SINE compound, and KPT-9274, its oral, dual inhibitor of p21-activated kinase 4 (PAK4) and nicotinamide phosphoribosyltransferase (NAMPT) (Filing, Q2, Karyopharm, 2016, AUG 4, 2016, View Source [SID:1234514318])).

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"In the first half of 2016, we continued to drive rapid and meaningful progress across our development programs, including completion of enrollment in our Phase 2b STORM study in multiple myeloma (MM), the opening of a Phase 1b study arm evaluating selinexor in combination with the PD-1 inhibitor pembrolizumab in advanced solid tumors, and the advancement of KPT-9274 into the clinic," said Michael G. Kauffman, MD, PhD, Chief Executive Officer of Karyopharm. "At the 2016 European Hematology Association (EHA) (Free EHA Whitepaper) Annual Meeting, we presented exciting preliminary data from our Phase 1b STOMP study showing high response rates, along with durable activity and a favorable safety profile when selinexor is combined with standard-of-care agents in heavily pre-treated patients with MM."

Dr. Kauffman continued, "We remain on track for data readouts from several of our ongoing selinexor studies, including top-line results from the STORM and STOMP studies in relapsed/refractory MM, updated data from the SIGN study in gynecologic malignancies at the European Society of Medical Oncology (ESMO) (Free ESMO Whitepaper) 2016 Annual Meeting, and an interim analysis from the ongoing Phase 2 SOPRA study in relapsed/refractory acute myeloid leukemia (AML) in late 2016. For KPT-8602, our second generation SINE compound, we look forward to reporting top-line safety and tolerability results from the Phase 1 portion of the ongoing study in patients with relapsed/refractory MM in late 2016. All of these efforts bring us ever closer to our goal of providing novel, first-in-class medicines to patients with cancer and other major diseases. We look forward to keeping you updated on our progress."

On August 4, 2016 Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) reported results for the quarter ended June 30, 2016 (Press release, Teva, AUG 4, 2016, View Source;p=RssLanding&cat=news&id=2192894 [SID:1234514316]).
Q2 2016
Revenues $5.0 billion
GAAP EPS $0.20
Non-GAAP EPS $1.25
Non-GAAP EPS adjusted to exclude the impact
of the December 2015 equity offerings
$1.43

On August 2, Teva completed the Actavis Generics acquisition
On August 3, Teva agreed to acquire Anda for $500 million
"We are pleased with our performance this quarter and the steps we are taking to transform our business, notably the recent completion of our acquisition of Actavis Generics and the proposed purchase of Anda Inc. We have brought together two leading businesses with complementary strengths, R&D capabilities, product pipelines and portfolios, geographical footprints, operational networks and cultures. The result is a stronger, more competitive Teva, well positioned to thrive in an evolving global marketplace," stated Erez Vigodman, President and CEO.
Vigodman continued, "Going forward we are focused on the integration of Actavis Generics, delivering on our operational and financial targets and on the ongoing development and commercialization of the more than 35 innovative products in our pipeline. We plan to use our strong cash flow to pay down debt and continue to invest in attractive specialty products. We are excited about our future and our ongoing pursuit to increase access to important medicines for patients around the world."
Second Quarter 2016 Results
Revenues in the second quarter of 2016 amounted to $5.0 billion, up 1% compared to the second quarter of 2015. Excluding the impact of foreign exchange fluctuations, revenues increased 4%.
Exchange rate differences between the second quarter of 2016 and the second quarter of 2015 reduced revenues by $141 million, GAAP operating income by $55 million and non-GAAP operating income by $52 million.
GAAP gross profit was $2.9 billion in the second quarter of 2016, down 1%, compared to the second quarter of 2015. GAAP gross profit margin was 57.1% in the quarter, compared to 58.4% in the second quarter of 2015. Non-GAAP gross profit was $3.2 billion in the second quarter of 2016, up 1% from the second quarter of 2015. Non-GAAP gross profit margin was 62.5% in the second quarter of 2016, compared to 62.8% in the second quarter of 2015.
Research and Development (R&D) expense (excluding equity compensation expenses and purchase of in-process R&D) in the second quarter of 2016 amounted to $370 million, compared to $357 million in the second quarter of 2015. R&D expenses were 7.3% of revenues in the quarter, compared to 7.2% in the second quarter of 2015. R&D expenses related to our generic medicines segment amounted to $125 million, compared to $134 million in the second quarter of 2015, a decrease of 7%. R&D expenses related to our specialty medicines segment amounted to $245 million, an increase of 11% compared to $220 million in the second quarter of 2015, mainly due to increased development costs related to assets acquired through the Labrys and Auspex transactions.
Selling and Marketing (S&M) expenses (excluding amortization of purchased intangible assets and equity compensation expenses) amounted to $898 million, or 17.8% of revenues, in the second quarter of 2016, compared to $846 million, or 17.0% of revenues, in the second quarter of 2015. S&M expenses related to our generic medicines segment amounted to $333 million, a decrease of 1% compared to $335 million in the second quarter of 2015, but an increase of 7% in local currency terms. The increase in local currency terms was mainly due to the additional costs related to our acquisition of Rimsa in the first quarter of 2016 and to the commencement of activities of our business venture in Japan. S&M expenses related to our specialty medicines segment amounted to $478 million, an increase of 5% in both U.S. dollar and local currency terms compared to $457 million in the second quarter of 2015, mainly due to increased royalties on sales.
General and Administrative (G&A) expenses (excluding equity compensation expenses) amounted to $299 million in the second quarter of 2016, or 5.9% of revenues, compared to $307 million and 6.2% in the second quarter of 2015.
GAAP operating income was $0.4 billion in the second quarter of 2016, down 45% compared to $0.7 billion in the second quarter of 2015. Quarterly non-GAAP operating income was $1.6 billion, down 2% compared to the second quarter of 2015.
EBITDA (non-GAAP operating income, which excludes amortization and certain other items, and excluding depreciation expenses for the period) amounted to $1.7 billion, down 1% compared to the second quarter of 2015.
GAAP financial expenses for the second quarter of 2016 amounted to $105 million, compared to $41 million in the second quarter of 2015. The increase in expenses is mainly the result of an impairment of our investment in Mesoblast. Non-GAAP financial expenses amounted to $6 million in the second quarter of 2016, compared to $41 million in the second quarter of 2015.
GAAP income tax expenses for the second quarter of 2016 amounted to $29 million, or 11% on pre-tax income of $256 million. In the second quarter of 2015, the provision for income taxes amounted to $88 million, or 14% on pre-tax income of $621 million. The provision for non-GAAP income taxes for the second quarter of 2016 amounted to $333 million on pre-tax non-GAAP income of $1.6 billion, for a quarterly tax rate of 21%. The provision for non-GAAP income taxes in the second quarter of 2015 was $345 million on pre-tax non-GAAP income of $1.6 billion, for a quarterly tax rate of 22%. While the tax rate may fluctuate quarterly, we expect our annual non-GAAP tax rate for 2016 to be 21%, similar to the rate in 2015.
For the second quarter of 2016, the weighted average outstanding shares for the fully diluted earnings per share calculation was 920 million on a GAAP basis and 979 million on a non-GAAP basis. The average weighted diluted shares outstanding used for the fully diluted share calculation for the second quarter of 2015 were 859 million shares, on both a GAAP and a non-GAAP basis. The increase in the number of shares resulted from our December 2015 equity offerings, with the number of shares on a non-GAAP basis including the potential dilution resulting from our mandatory convertible preferred shares, which had a dilutive effect on our non-GAAP earnings per share.
Excluding the impact of the December 2015 equity offerings to finance the Actavis Generics acquisition, the weighted average outstanding shares for the fully diluted earnings per share calculation on a non-GAAP basis for the second quarter of 2016 was 860 million shares.
As of June 30, 2016, the fully diluted share count for calculating Teva’s market capitalization was approximately 995 million shares.
GAAP net income attributable to Teva and GAAP diluted EPS were $254 million and $0.20, respectively, in the second quarter of 2016, compared to $539 million and $0.63, respectively, in the second quarter of 2015. Non-GAAP net income and non-GAAP diluted EPS were $1.2 billion and $1.25, respectively, in the second quarter of 2016, compared to $1.2 billion and $1.43 in the second quarter of 2015. Non-GAAP EPS adjusted to exclude the December 2015 equity offerings was $1.43.
Non-GAAP information: Net non-GAAP adjustments in the second quarter of 2016 amounted to $974 million. Non-GAAP net income and non-GAAP EPS for the quarter were adjusted to exclude the following items:
Impairment of long-lived assets of $572 million mainly related to Revascor and Zecuity;
Amortization of purchased intangible assets totaling $193 million, of which $146 million is included in cost of goods sold and the remaining $47 million in selling and marketing expenses;
Legal settlements and loss contingencies of $166 million mainly related to a settlement in principle reached in connection with the aripiprazole litigation;
Financial expenses of $99 million related to the impairment of our investment in Mesoblast;
Inventory step-up of $85 million;
Acquisition, integration and restructuring expenses of $82 million;
Other write-offs associated with the impairment of Zecuity and other items of $57 million;
Costs related to regulatory actions taken in facilities of $39 million;
Equity compensation of $28 million;
Minority interest adjustment of negative $43 million; and
Related tax benefit of $304 million.
The non-GAAP data presented by Teva are the results used by Teva’s management and board of directors to evaluate the operational performance of the company, to compare against the company’s work plans and budgets, and ultimately to evaluate the performance of management. Teva provides such non-GAAP data to investors as supplemental data and not in substitution or replacement for GAAP results, because management believes such data provides useful information to investors and facilitates investors’ understanding of its business. See the attached tables for a reconciliation of the U.S. GAAP results to the adjusted non-GAAP figures.
Cash flow from operations generated during the second quarter of 2016 amounted to $1.0 billion, a decrease of 35% compared to the second quarter of 2015. The decrease was mainly due to an increase in accounts receivables, net of SR&A, partially offset by an increase in accounts payable. Free cash flow, excluding net capital expenditures, amounted to $0.8 billion, a decrease of 40% compared to the second quarter of 2015.
Cash and investments at June 30, 2016 increased to $8.2 billion, compared to $7.2 billion at March 31, 2016.
Total shareholders’ equity was $32.0 billion at June 30, 2016, compared to $30.6 billion at March 31, 2016.
Segment Results for the Second Quarter 2016
Generic Medicines Segment
Three Months Ended June 30,
2016 2015
U.S.$ in millions / % of Segment Revenues

Revenues $ 2,294 100.0% $ 2,466 100.0%
Gross profit 1,072 46.7% 1,198 48.6%
R&D expenses 125 5.4% 134 5.4%
S&M expenses 333 14.5% 335 13.6%
Segment profit* $ 614 26.8% $ 729 29.6%

* Segment profit consists of gross profit for the segment, less R&D and S&M expenses related to the segment. Segment profit does not include G&A expenses, amortization and certain other items.
Generic Medicines Revenues
Generic medicines revenues in the second quarter of 2016 amounted to $2.3 billion, a decrease of 7% compared to the second quarter of 2015. In local currency terms, revenues decreased 4%.
Generic revenues consisted of:
U.S. revenues of $892 million, a decrease of 33% compared to the second quarter of 2015. The decrease resulted mainly from a decline in sales of aripiprazole (Abilify), esomeprazole (Nexium) and budesonide (Pulmicort) due to loss of exclusivity.
European revenues of $660 million, a decrease of 1%, in both U.S. dollar and local currency terms, compared to the second quarter of 2015. This resulted mainly from our strategy of pursuing profitable and sustainable business in the region along with higher API sales to third parties.
ROW revenues of $742 million, an increase of 56%, or 71% in local currency terms, compared to the second quarter of 2015. The increase in local currency terms was mainly due to higher revenues in Japan from our new business venture with Takeda, which commenced operations in April 2016, as well as an increase in revenues in Venezuela and Canada.
API sales to third parties of $207 million (which is included in the market revenues above), an increase of 13%, compared to the second quarter of 2015, with higher revenues in both Europe and the United States.
Generic medicines revenues comprised 46% of our total revenues in the quarter, compared to 50% in the second quarter of 2015.
Generic Medicines Gross Profit
Gross profit from our generic medicines segment in the second quarter of 2016 amounted to $1.1 billion, a decrease of 11% compared to the second quarter of 2015. The lower gross profit was mainly a result of the lower sales of aripiprazole (Abilify) and esomeprazole (Nexium) in the United States, which are both high gross profit products. This decrease was partially offset by higher gross profit of our ROW and European markets and of our API business. Gross profit margin for our generic medicines segment in the second quarter of 2016 decreased to 46.7%, from 48.6% in the second quarter of 2015.
Generic Medicines Profit
Our generic medicines segment generated profit of $614 million in the second quarter of 2016, a decrease of 16% compared to the second quarter of 2015. Generic medicines profitability as a percentage of generic medicines revenues was 26.8% in the second quarter of 2016, down from 29.6% in the second quarter of 2015. The decrease was primarily due to the lower gross profit of the segment.
Specialty Medicines Segment
Three Months Ended June 30,
2016 2015
U.S.$ in millions / % of Segment Revenues

Revenues $ 2,271 100.0% $ 2,090 100.0%
Gross profit 1,978 87.1% 1,808 86.5%
R&D expenses 245 10.8% 220 10.5%
S&M expenses 478 21.0% 457 21.9%
Segment profit* $ 1,255 55.3% $ 1,131 54.1%

* Segment profit is comprised of gross profit for the segment, less R&D and S&M expenses related to the segment. Segment profit does not include G&A expenses, amortization and certain other items.
Specialty Medicines Revenues
Specialty medicines revenues in the second quarter of 2016 amounted to $2.3 billion, an increase of 9% compared to the second quarter of 2015. U.S. specialty medicines revenues amounted to $1.8 billion, up 9% compared to the second quarter of 2015. European specialty medicines revenues amounted to $414 million, an increase of 10%, or 9% in local currency terms, compared to the second quarter of 2015. ROW specialty revenues amounted to $85 million, down 6%, though up 5% in local currency terms, compared to the second quarter of 2015.
Specialty medicines revenues comprised 45% of our total revenues in the quarter, compared to 42% in the second quarter of 2015.
The increase in specialty medicines revenues compared to the second quarter of 2015 was due to higher revenues in all our core therapeutic areas.
The following table presents revenues by therapeutic area and key products for our specialty medicines segment for the three months ended June 30, 2016 and 2015:


Three Months Ended
June 30,
Percentage
Change
2016 2015 2016 – 2015
U.S. $ in millions
CNS $ 1,415 $ 1,353 5%
Copaxone 1,141 1,054 8%
Azilect 108 105 3%
Nuvigil 51 91 (44%)
Respiratory 313 253 24%
ProAir 135 128 5%
QVAR 116 83 40%
Oncology 334 293 14%
Treanda and Bendeka 207 179 16%
Women’s Health 117 110 6%
Other Specialty 92 81 14%
Total Specialty Medicines $ 2,271 $ 2,090 9%

Global revenues of Copaxone (20 mg/mL and 40 mg/mL), the leading multiple sclerosis therapy in the U.S. and globally, amounted to $1.1 billion, an increase of 8% compared to the second quarter of 2015.
Copaxone revenues in the United States amounted to $955 million, an increase of 10% compared to the second quarter of 2015. The increase was mainly due to a reduction of sales in the Medicaid channel, resulting in both lower rebates in the current quarter and a positive change in the estimate for rebates in prior quarters, as well as the impact of a price increase of 7.9% in January 2016 on both Copaxone products. At the end of the second quarter of 2016, according to June 2016 IMS data, our U.S. market shares for the Copaxone products in terms of new and total prescriptions were 24.9% and 29.1%, respectively. Copaxone 40 mg/mL accounted for 82% of total Copaxone prescriptions in the U.S.
Copaxone revenues outside the United States amounted to $186 million, an increase of 1%, or 3% in local currency terms, compared to the second quarter of 2015 due to higher volumes in certain European and ROW markets.
Our global Azilect revenues amounted to $108 million, an increase of 3% compared to the second quarter of 2015. Global in-market sales decreased 9% due to generic competition in certain European markets.
Revenues of our respiratory products amounted to $313 million, up 24% compared to the second quarter of 2015. ProAir revenues in the quarter amounted to $135 million, up 5% compared to the second quarter of 2015, due to positive price effects, partially offset by lower volumes. QVAR global revenues amounted to $116 million in the second quarter of 2016, up 40% compared to the second quarter of 2015, mainly due to positive price effects.
Revenues of our oncology products amounted to $334 million in the second quarter of 2016, up 14% from the second quarter of 2015. Revenues of Treanda and Bendeka amounted to $207 million, an increase of 16% compared to the second quarter of 2015, mainly due to higher volumes sold.
Specialty Medicines Gross Profit
Gross profit from our specialty medicines segment amounted to $2.0 billion, an increase of $170 million compared to the second quarter of 2015. Gross profit margin for our specialty medicines segment in the second quarter of 2016 was 87.1%, compared to 86.5% in the second quarter of 2015.
Specialty Medicines Profit
Our specialty medicines segment profit amounted to $1.3 billion in the second quarter of 2016, up 11% compared to the second quarter of 2015, mainly due to higher gross profit, which was partially offset by increases in S&M and R&D expenses.
Specialty medicines profit as a percentage of segment revenues was 55.3% in the second quarter of 2016, up from 54.1% in the second quarter of 2015.
The following tables present details of our multiple sclerosis franchise and of our other specialty medicines for the three months ended June 30, 2016 and 2015:
Multiple Sclerosis
Three months ended June 30,
2016 2015
U.S.$ in millions / % of MS Revenues

Revenues $ 1,141 100.0% $ 1,054 100.0%
Gross profit 1,029 90.2% 953 90.4%
R&D expenses 20 1.8% 26 2.5%
S&M expenses 81 7.1% 88 8.3%
MS profit $ 928 81.3% $ 839 79.6%

Other Specialty
Three months ended June 30,
2016 2015
U.S.$ in millions / % of Other Specialty Revenues

Revenues $ 1,130 100.0% $ 1,036 100.0%
Gross profit 949 84.0% 855 82.5%
R&D expenses 225 19.9% 194 18.7%
S&M expenses 397 35.2% 369 35.6%
Other Specialty profit $ 327 28.9% $ 292 28.2%

Other Activities
Our OTC revenues related to PGT amounted to $262 million, an increase of 25% compared to $210 million in the second quarter of 2015. In local currency terms, revenues increased 58%, mainly due to inflation in Venezuela. PGT’s in-market sales amounted to $379 million in the second quarter of 2016, an increase of $54 million compared to the second quarter of 2015.
Other revenues amounted to $211 million in the second quarter of 2016, mostly from the distribution of third-party products in Israel and Hungary, compared to revenues of $200 million, in the second quarter of 2015.
FY 2016 Financial Outlook
We expect revenues for 2016 to be $22.0-22.5 billion.
Non-GAAP EPS for 2016 is expected to be $5.20-5.40, based on a weighted average number of shares of 1,021 million.
Cash flow from operating activities for 2016 is expected to be $5.7-6.1 billion.
These estimates reflect management’s current expectations for Teva’s performance in 2016. Actual results may vary, whether as a result of exchange rate differences, market conditions or other factors. In addition, the non-GAAP figures exclude the amortization of purchased intangible assets, costs related to certain regulatory actions, inventory step-up, legal settlements and reserves, impairments and related tax effects.
Dividends
On August 1, 2016, the Board of Directors declared a cash dividend of $0.34 per ordinary share for the second quarter of 2016. For holders of our ordinary shares that are traded on the Tel Aviv Stock Exchange, the dividend will be converted into new Israeli shekels based on the official exchange rate as of August 4, 2016. The record date will be August 22, 2016, and the payment date will be September 8, 2016. Tax will be withheld at a rate of 15%.
On August 1, 2016, the Board of Directors further declared a quarterly cash dividend of $17.50 per mandatory convertible preferred share. The record date will be September 1, 2016 and the payment date will be September 15, 2016. Tax will be withheld at a rate of 15%.

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On August 4, 2016 TESARO, Inc. (NASDAQ:TSRO), an oncology-focused biopharmaceutical company, reported operating results for second-quarter 2016 and provided an update on the Company’s marketed product and development programs (Press release, TESARO, AUG 4, 2016, View Source [SID:1234514313]).

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"The second quarter of 2016 was an exciting time for TESARO, marked by the availability of positive clinical results from our NOVA trial of niraparib. These results are the first and only Phase 3 data for a PARP inhibitor in a population of patients with platinum-sensitive, recurrent ovarian cancer," said Lonnie Moulder, CEO of TESARO. "Looking ahead, we intend to leverage these landmark data to enhance our ongoing ovarian cancer trials and expand the overall development strategy for niraparib. We are globalizing our mission of delivering transformative cancer therapies to patients, and are now expanding our commercial footprint in Europe to support planned launches of oral rolapitant and niraparib next year. Finally, our immuno-oncology portfolio continues to rapidly advance, and our antibody candidates targeting TIM-3 and PD-1 are now in Phase 1 studies."

Recent Business Highlights

The U.S. launch of VARUBI continues, and unit volume increased by 30% for the second quarter compared to the first quarter. For the month of June, VARUBI achieved a 27% market share in the oral NK-1 market in the U.S.
The New Drug Application (NDA) for an intravenous (IV) formulation of rolapitant was accepted for review by the Food and Drug Administration (FDA), and a U.S. launch is planned for the first half of 2017.
The Marketing Authorisation Application (MAA) for oral rolapitant is under review by the European Medicines Agency (EMA). In order to support a launch of niraparib and oral rolapitant in 2017, TESARO is now expanding its commercial operations in key European countries.
In June, TESARO and the European Network for Gynaecological Oncological Trial groups (ENGOT) announced that the Phase 3 NOVA trial of niraparib successfully achieved its primary endpoint of progression-free survival (PFS). This trial demonstrated that niraparib significantly prolonged PFS compared to control for patients in both the germline BRCA mutation (gBRCAmut) cohort and the non-germline BRCA mutation (non-gBRCAmut) cohort. These data will support NDA and MAA submissions during the fourth quarter of 2016.
Ongoing trials of niraparib in combination with other agents include the TOPACIO trial (formerly KEYNOTE-162) with KEYTRUDA (pembrolizumab) in patients with ovarian cancer or with triple negative breast cancer, and the AVANOVA trial with bevacizumab in patients with ovarian cancer.
The Phase 1 dose escalation study of TSR-022, our anti-TIM-3 antibody candidate, has been initiated, and the Phase 1 study of TSR-042, our anti-PD-1 antibody candidate, continues to enroll patients.
TESARO completed a public offering of common stock in July 2016, resulting in approximately $409 million in net proceeds.
Second Quarter 2016 Financial Results

TESARO reported a net loss of $58.4 million, or ($1.28) per share, for the second quarter of 2016, compared to a net loss of $60.6 million, or ($1.51) per share, for the second quarter of 2015.

Revenue recognition for certain sales of VARUBI to specialty distributors continues to be deferred at this point in the commercial launch. Net product revenue for the second quarter of 2016 totaled $1.4 million and included sales of VARUBI from specialty pharmacy customers to patients that were made during the second quarter, as well as sales from specialty distributors to providers that occurred in the first quarter of 2016 and the fourth quarter of 2015. The specialty pharmacy sales made during the second quarter represented a small portion of total product shipments. License revenue for the second quarter of 2016 totaled $35.1 million and included an up-front payment of $35 million from Janssen related to initiation of the global niraparib prostate cancer collaboration.

Research and development expenses increased to $50.1 million for the second quarter of 2016, compared to $38.9 million for the second quarter of 2015, driven primarily by higher costs related to the ongoing registration trials of niraparib, manufacturing costs associated with IV rolapitant and niraparib, and the advancement of our immuno-oncology portfolio, in addition to increased headcount.

Selling, general and administrative expenses increased to $36.2 million for the second quarter of 2016, compared to $16.8 million for the second quarter of 2015, primarily due to increased commercial headcount, including the establishment of a U.S. field sales organization in the fall of 2015, commercial activities in support of the launch of VARUBI, and higher professional service fees.

Acquired in-process research and development expenses totaled $4.0 million for the second quarter of 2016 and included a milestone payment related to our immuno-oncology portfolio, compared to $1.0 million for the second quarter of 2015, which also related to a development milestone achieved within our immuno-oncology programs. Operating expenses, as described above, include total non-cash, stock-based compensation expense of $11.7 million for the second quarter of 2016, compared to $5.5 million for the second quarter of 2015.

As of June 30, 2016, TESARO had approximately $320 million in cash and cash equivalents. This cash and cash equivalents total excludes the $409 million in net proceeds resulting from a follow-on offering of 5.3 million shares of common stock that was completed in July 2016.

For the quarter ended June 30, 2016, TESARO had approximately 45.8 million shares outstanding on a weighted average basis. As of July 7, following completion of the follow-on offering on that date, TESARO had approximately 51.4 million outstanding shares of common stock.

In anticipation of four product launches in 2017, TESARO will 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 on average, per quarter, during the third and fourth quarters 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 IV rolapitant into the U.S. market in 1H 2017, pending FDA approval;
Establish a European commercial organization; and
Launch oral rolapitant in Europe in 1H 2017, pending EMA approval.
Niraparib:

Present NOVA data at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) annual congress in Copenhagen in October;
Submit the niraparib NDA and MAA in Q4 2016;
Launch niraparib in the U.S. in 1H 2017 and in Europe in 2H 2017, pending regulatory approval;
Submit sNDA and MAA based upon QUADRA data in mid-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 mid-2017.
Immuno-Oncology Portfolio:

Identify a dose and schedule for TSR-042 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.

On August 4, 2016 Stemline Therapeutics, Inc. (Nasdaq:STML) reported financial results for the quarter ended June 30, 2016 (Press release, Stemline Therapeutics, AUG 4, 2016, View Source [SID:1234514305]). Clinical highlights and milestones include:

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SL-401 in blastic plasmacytoid dendritic cell neoplasm (BPDCN)

Oral presentations of Phase 2 clinical trial results of SL-401 in patients with BPDCN delivered at annual meetings of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) and the European Hematology Association (EHA) (Free EHA Whitepaper).
SL-401 efficacy and safety data continue to be positive with increasing treatment duration, drug exposure, and patient enrollment.
As of July 2016, 29 BPDCN patients have received SL-401, including 26 adults (16 first-line and 10 relapsed/refractory) and 3 pediatric compassionate use patients.
SL-401 continues to maintain high overall response rates (ORR) in both first-line (>90% ORR) and relapsed/refractory adult BPDCN (>50% ORR). Notably, a relapsed/refractory BPDCN patient was recently bridged to stem cell transplant (SCT) following a major response to SL-401.
Response duration, progression free and overall survival data continue to mature and trend favorably. Multiple patients remain progression free after receiving ongoing SL-401 treatment (up to 12+ months [16+ cycles], ongoing) or experiencing a major response on SL-401 and proceeding to SCT (up to 16+ months, ongoing).
Further clinical and regulatory updates expected this year.
SL-401 in additional malignancies

Completed lead-in, dose escalation stage of Phase 2 trial in patients with acute myeloid leukemia (AML) in remission with high relapse risk including minimal residual disease (MRD). There were no unexpected side effects and no dose limiting toxicities. The expansion stage is currently enrolling MRD+ AML patients at 12 ug/kg.
Patients are currently enrolling in the lead-in, dose escalation stage of a Phase 2 trial in advanced, high risk myeloproliferative neoplasms (MPN). The first two dosing cohorts have been cleared with no unexpected side effects and no dose limiting toxicities. Patients are currently enrolling in the third dosing cohort, 12 ug/kg.
Patients are currently enrolling in a Phase 1/2 trial in relapsed or refractory multiple myeloma with SL-401 in combination with pomalidomide and dexamethasone (POM+DEX); the first combination trial of SL-401 with another agent. No unexpected side effects and no dose limiting toxicities have been observed with the combination to date. Enrollment continues.
Further clinical updates expected later this year from these trials.
SL-701

Phase 2 trial of SL-701 in combination with bevacizumab in adult patients with second-line GBM currently enrolling patients.
Trial updates expected later this year.
SL-801

Phase 1 trial of SL-801 in patients with advanced solid tumors currently enrolling. The first and second dosing cohorts have cleared, and the third cohort is currently enrolling.
Trial updates expected later this year and on into next year.
Ivan Bergstein, M.D., Stemline’s Chief Executive Officer, commented, "We are making substantial progress across our entire clinical pipeline this year. A key highlight of the quarter was the high profile oral presentations of positive results from our ongoing Phase 2 potentially pivotal trial of SL-401 in BPDCN at both the ASCO (Free ASCO Whitepaper) and EHA (Free EHA Whitepaper) annual meetings." Dr. Bergstein continued, "The efficacy and safety data from this trial continue to be strong with increasing treatment duration and patient exposure. We look forward to additional clinical and regulatory updates this year, including more clarity around our registration pathway and timeline."

Dr. Bergstein concluded, "As we continue to build upon our compelling data in BPDCN, we also look forward to further updates later this year regarding our multiple enrolling trials with SL-401 in additional hematologic cancers, SL-701 in brain cancer, and SL-801 in advanced solid tumors. Importantly, our strong cash position provides us with the resources to reach important milestones across all of our programs this year and beyond."

Second Quarter 2016 Financial Results Review
Stemline ended the second quarter of 2016 with $81.2 million in cash, cash equivalents and investments, as compared to $87.8 million as of March 31, 2016, which reflects a cash burn of $6.6 million for the quarter.

For the second quarter of 2016, Stemline had a net loss of $9.3 million, or $0.52 per share, compared with a net loss of $10.2 million, or $0.58 per share, for the same period in 2015.

Research and development expenses were $6.9 million for the second quarter of 2016, which reflects a decrease of $1.3 million, or 16%, compared with $8.2 million for the second quarter of 2015. The lower expenses year over year were primarily attributable to an increase in costs in the prior year relating to clinical site startup expenses and initiation of clinical trial activities.

General and administrative expenses were $2.9 million for the second quarter of 2016, which reflects an increase of $0.7 million, or 33%, compared with $2.2 million for the second quarter of 2015. The increase in expense year over year was primarily attributable to higher non-cash stock based compensation and payroll costs relating to employees.