On August 6, 2015 Clovis Oncology, Inc. (NASDAQ:CLVS) reported financial results for its quarter ended June 30, 2015, and provided an update on the Company’s clinical development programs for 2015 (Press release, Clovis Oncology, AUG 6, 2015, View Source;p=RssLanding&cat=news&id=2076802 [SID:1234507085]).

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"This is a very exciting time for our company," said Patrick J. Mahaffy, President and CEO of Clovis Oncology. "We have completed our first rociletinib NDA and MAA submissions, we are building out our commercial organizations in both the U.S. and E.U., and we are preparing for a potential U.S. launch as early as the end of this year. We are quickly accelerating toward becoming a global commercial biopharmaceutical organization."

Second Quarter 2015 Financial Results

The Company reported no revenues for the second quarter and first half of 2015, compared to $13.6 million for the first quarter and first half of 2014 which consisted of a milestone payment pursuant to its collaboration and license agreement for lucitanib with Les Laboratoires Servier (Servier).

Research and development expenses totaled $60.4 million for the second quarter of 2015 and $117.1 million for the first half of 2015, compared to $28.4 million and $52.6 million for the comparable periods in 2014. The increase in expenses for both the three- and six-month periods is due to the significantly expanded clinical development activities for rociletinib and rucaparib, increased launch planning activities for rociletinib and increased personnel-related expenses associated with the hiring of additional staff to support the Company’s expanded activities.

General and administrative expenses totaled $7.2 million for the second quarter of 2015 and $14.0 million for the first half of 2015, compared to $5.3 million and $10.6 million for the comparable periods in 2014. The year over year increase is primarily due to higher share-based compensation and personnel expense for employees engaged in general and administrative activities, increased facility costs and higher professional service fees.

Net loss attributable to common shareholders was $71.5 million ($2.10 per share) for the second quarter of 2015 and $134.7 million ($3.96 per share) for the first half of 2015, compared to a net loss of $34.8 million ($1.03 per share) and $65.5 million ($1.93 per share) for the comparable periods of 2014. Share-based compensation expense totaled $8.4 million for the second quarter of 2015 and $17.1 million for the first half of 2015.

Clovis had $377.6 million in cash, cash equivalents and available-for-sale securities and approximately 34.1 million outstanding shares of common stock as of June 30, 2015. In July 2015, the Company raised net proceeds of $298.0 million through an offering of 4.1 million shares of common stock.

2015 Key Milestones and Objectives

Highlights of planned or completed objectives for each product follows:

Rociletinib

Rociletinib is an oral, potent, mutant-selective inhibitor of epidermal growth factor receptor (EGFR) under investigation for the treatment of EGFR-mutated non-small cell lung cancer (NSCLC). Rociletinib targets the activating mutations of EGFR (L858R and Del19), while also inhibiting the dominant acquired resistance mutation, T790M. The T790M mutation develops in approximately 60 percent of patients treated with first- and second-generation EGFR inhibitors.

On July 30, 2015, the Company submitted its New Drug Application (NDA) regulatory filing to the U.S. Food and Drug Administration (FDA) for rociletinib for the treatment of patients with mutant EGFR NSCLC who have been previously treated with an EGFR-targeted therapy and have the EGFR T790M mutation as detected by an FDA approved test. Rociletinib was granted Breakthrough Therapy designation by the U.S. FDA in May 2014. Clovis also submitted its Marketing Authorization Application (MAA) to the European Medicines Agency (EMA) through the centralized procedure for rociletinib for the same indication. There is a validation period before both applications are formally accepted, after which the review commences.

The U.S. and E.U. regulatory submissions include data from two single-arm studies, TIGER-X and TIGER-2. During the second quarter, updated findings from the TIGER-X study, evaluating the safety and activity of rociletinib in a very advanced EGFR-mutant NSCLC patient population were presented at the 2015 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) annual meeting. Highlights of the data presented included the following:

60% overall response rate (ORR) and 90% disease control rate (DCR) in heavily pretreated centrally confirmed tissue T790M-positive patients at the 500mg BID dose

Median progression free survival (PFS) of 10.3 months observed in patients without a history of CNS metastases; median PFS of 8 months observed in an overall population of 270 heavily pretreated centrally confirmed tissue T790M-positive patients, including 40% of patients with a history of CNS metastases

37% ORR in centrally confirmed tissue T790M-negative patients

57% ORR and 80% DCR in centrally confirmed plasma-genotyped T790M-positive patients – may allow for broader testing for mutations in patients ineligible for tissue biopsy

Well-tolerated; the most frequent adverse reactions or lab abnormalities reported were diarrhea, nausea, fatigue, QTc prolongation and hyperglycemia; the only Grade 3 adverse reaction or lab abnormality reported in greater than 5% of patients was hyperglycemia

Rucaparib

Rucaparib is an oral, potent small molecule inhibitor of PARP1 and PARP2 being developed for the treatment of ovarian cancer, specifically in patients with tumors with BRCA mutations and other DNA repair deficiencies beyond BRCA, commonly referred to as "BRCA-like."

In April 2015, Clovis was granted its second Breakthrough Therapy designation by the U.S. Food and Drug Administration (FDA), in this case for rucaparib as monotherapy treatment of advanced ovarian cancer in patients who have received at least two lines of prior platinum-containing therapy, with BRCA-mutated tumors, inclusive of both germline BRCA (gBRCA) and somatic BRCA (sBRCA) mutations.

Also during the second quarter, updated findings from ARIEL2 and Study 10, two ongoing studies evaluating the safety and activity of rucaparib in advanced ovarian cancer patients, were presented at the 2015 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) annual meeting. Data from these studies demonstrated encouraging activity and safety in women with advanced, platinum-sensitive ovarian cancer with gBRCA and sBRCA mutations. In addition, these data demonstrated that the application of Clovis’ proprietary BRCA-like tumor DNA signature to Foundation Medicine’s companion diagnostic assay successfully predicts the population of BRCA-like patients that are not gBRCA or sBRCA that respond to rucaparib therapy. Highlights of the data presented included the following (all RECIST response rates):

Data from ARIEL2 in BRCA-mutant patients demonstrated an ORR of 69%, a DCR of 94% and a median PFS of 9.4 months
Complete responses (CRs) observed in 10% of patients
Data from ARIEL2 in patients with the BRCA-like signature demonstrated an ORR of 30%, a DCR of 73% and a median PFS of 7.1 months

Approximately 60% of the 204 patients treated in the initial ARIEL2 study had either BRCA-mutant or BRCA-like tumors
61% ORR and median duration of response greater than 11 months observed in 23 BRCA-mutant patients treated with at least three prior lines of chemotherapy from ARIEL2 and Study 10 combined
CRs observed in 13% of patients in this group

Rucaparib is well-tolerated with a manageable safety profile. The grade 3/4 treatment-related adverse events (AEs) observed in >15% of patients treated with the recommended 600mg BID dose were anemia/decreased hemoglobin (16%) in ARIEL2, and fatigue/asthenia (18%), and anemia (25%) in Study 10

Lucitanib

Lucitanib is an oral, potent inhibitor of the tyrosine kinase activity of fibroblast growth factor receptors 1 through 3 (FGFR1-3), vascular endothelial growth factor receptors 1 through 3 (VEGFR1-3), and platelet-derived growth factor receptors alpha and beta (PDGFRα-β). Clovis, which holds exclusive U.S. and Japanese rights, is collaborating with its development partner Les Laboratoires Servier (Servier) on the global clinical development of lucitanib outside of China, initially targeting solid tumors with FGFR pathway activation, including breast and lung cancers.

A Phase 2 program is underway to explore lucitanib in multiple indications, including a U.S. study in patients with treatment-refractory FGF-aberrant breast cancer and a global study in patients with advanced lung cancer with FGFR1 amplification, both of which are currently enrolling patients. In parallel with these Clovis-sponsored studies, a Servier-sponsored Phase 2 study of lucitanib in patients with advanced breast cancer is underway to identify the population of patients most likely to benefit from lucitanib therapy. The Company anticipates initial data from its breast cancer study by year-end 2015.

On August 6, 2015 ChemoCentryx, Inc., (Nasdaq:CCXI), a clinical-stage biopharmaceutical company focused on autoimmune diseases, inflammatory disorders and cancer, reported financial results for the second quarter ended June 30, 2015 and provided an update on the Company’s corporate and clinical development activities (Press release, ChemoCentryx, AUG 6, 2015, View Source [SID:1234507084]).

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"We continued to execute on all of our planned initiatives during the quarter and remain on track to deliver on several key milestones during 2015. We are particularly excited about the progress in our orphan and rare diseases program with our lead drug candidate, CCX168," said Thomas J. Schall, Ph.D., President and Chief Executive Officer of ChemoCentryx. "Both the CLEAR and CLASSIC Phase II trials of CCX168 in patients with ANCA-associated vasculitis reached significant enrollment milestones, and we also initiated an important proof-of-concept trial in patients with atypical Hemolytic Uremic Syndrome. Further, in the immuno-oncology area, we have completed the first part of a two-part clinical trial of CCX872 in patients with advanced pancreatic cancer and we look forward to reporting early results from this trial by year-end."

Recent Pipeline Developments Across Key Therapeutic Areas

Orphan and Rare Diseases: CCX168 is one of the Company’s lead drug candidates. It is an orally-administered inhibitor of the complement C5a receptor (C5aR), and is being developed for several rare disease indications, including ANCA-associated vasculitis (AAV) and atypical Hemolytic Uremic Syndrome (aHUS). These are severe and often fatal autoimmune diseases that are characterized by inflammation that can negatively affect many different areas of the body.

Patient enrollment was completed in the European Phase II CLEAR clinical trial of CCX168 in AAV;
Additionally, patient enrollment in the Phase II CLASSIC trial in North America of CCX168 in AAV reached the halfway mark, per plan;

A Phase II proof-of-concept clinical trial was initiated for the treatment of aHUS in patients with end stage renal disease with CCX168;

Data demonstrating the anti-thrombogenic effect of CCX168 in serum from patients with aHUS were presented at the 52nd European Renal Association – European Dialysis and Transplant Association (ERA-EDTA) Congress in London; and
ChemoCentryx collaborators presented data supporting the biological mechanism of C5a inhibition and the resultant anti-thrombotic effect in aHUS by showing that, in serum, CCX168 blocks aHUS induced up-regulation of Von Willebrand factor (VWF) on human microvascular endothelial cells at the 15th European Meeting on Complement in Human Disease in Uppsala, Sweden.
Chronic Kidney Disease: CCX140, an inhibitor of the chemokine receptor known as CCR2 and one of the Company’s lead drug candidates, is being developed as an orally administered therapy for the treatment of diabetic nephropathy, a form of chronic kidney disease.

Positive clinical results from the Phase II trial in patients with diabetic nephropathy treated with CCX140 were presented at the 52nd ERA-EDTA Congress in London in a late breaking oral presentation.

Immuno-Oncology: CCX872, a potent and selective inhibitor of the chemokine receptor known as CCR2, is being evaluated in patients with non-resectable pancreatic cancer.

Patient enrollment advanced in the clinical trial of non-resectable pancreatic cancer treated with CCX872; Part A of the trial has completed and enrollment in Part B has commenced. The two-part trial is evaluating if the combination of CCX872 and FOLFIRINOX, one of the current standard of care treatments for advanced pancreatic cancer, can promote a more effective anti-tumor response in these patients than standard care treatment alone.

Anticipated Milestones

Orphan and Rare Diseases:

Report top-line data by the end of 2015 from the Phase II CLEAR trial in patients with AAV treated with CCX168, which is being conducted in Europe;
Continue enrollment in the Phase II CLASSIC trial in AAV in North America, and report top-line data in the first half of 2016;
Plan for an End of Phase II meeting in 2016 and, with positive CLEAR and CLASSIC Phase II results, initiate Phase III trial in patients with AAV by the end of 2016; and
Report initial results from the CCX168 Phase II proof-of-concept trial in patients with aHUS by the end of 2015.

Chronic Kidney Disease:

Present additional study results from the CCX140 Phase II trial in diabetic nephropathy at subsequent medical meetings and in peer-reviewed publications during the year;
Continue design of Phase III trials and preparation for Phase III development; and
Prepare for an End of Phase II meeting with the FDA.
Immuno-Oncology:

Continue to advance the pancreatic cancer trial of CCX872 in combination with FOLFIRINOX and report early results by the end of 2015; and
Present preclinical results from the combination therapy of chemokine receptor and check point inhibitors in the fourth quarter of 2015.

Second Quarter 2015 Financial Results

Research and development expenses were $8.6 million for the three months ended June 30, 2015 compared to $9.0 million reported for the same period in 2014. The decrease in research and development expenses from 2014 to 2015 were primarily attributable to lower expenses associated with CCX140, the Company’s CCR2 inhibitor, due to the completion of the Phase II clinical trial in patients with diabetic nephropathy in the fourth quarter of 2014 and CCX507, the Company’s second generation CCR9 inhibitor, due to the completion of Phase I clinical development in the third quarter of 2014. These decreases were partially offset by higher expenses associated with CCX168, the Company’s C5aR inhibitor, due to continuing patient enrollment in the third and final step of the CLEAR Phase II clinical trial in Europe and the CLASSIC Phase II clinical trial in North America for the treatment of AAV. Further, the commencement of enrollment in Phase II proof of concept clinical trials in patients with Immunoglobulin A nephropathy, or IgAN and aHUS and costs associated with initiating a Phase Ib clinical trial with CCX872, the Company’s second generation CCR2 inhibitor, in patients with pancreatic cancer in the second quarter of 2015 contributed to the increase.

General and administrative expenses were $3.6 million for the three months ended June 30, 2015 compared to $3.4 million for the comparable period in 2014. The increase in general and administrative expenses from 2014 to 2015 was primarily due to increases in stock based compensation expense for stock option grants and restricted stock unit awards and professional service expenses.

Net loss was $12.1 million for the second quarter ended June 30, 2015 compared to $12.3 million in the same period in 2014.

Total shares outstanding at June 30, 2015 were approximately 44.1 million shares.

Cash, cash equivalents and investments totaled $94.2 million at June 30, 2015.

On August 6, 2015 bluebird bio, Inc. (Nasdaq: BLUE), a clinical-stage company committed to developing potentially transformative gene therapies for severe genetic and rare diseases and T cell-based immunotherapies, reported business highlights and financial results for the second quarter ended June 30, 2015 (Press release, bluebird bio, AUG 6, 2015, View Source;p=RssLanding&cat=news&id=2076874 [SID:1234507082]).

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"The first half of this year was a period of exceptional progress for bluebird bio across all fronts, and we made significant strides toward our goal of delivering transformative gene therapy products to change the lives of patients," said Nick Leschly, chief bluebird. "We gained general agreement from U.S. and E.U. regulators on the path forward for LentiGlobin in beta-thalassemia major, and presented early data in severe sickle cell disease that supports the potential for LentiGlobin to make a meaningful difference for these patients. We also spoke for the first time in greater detail about our strategy to build an independent, differentiated immuno-oncology business."

Recent Highlights

SICKLE CELL DISEASE (SCD) AND BETA-THALASSEMIA DATA PRESENTATION AT THE 20TH CONGRESS OF THE EUROPEAN HEMATOLOGY ASSOCIATION – Presented positive data from two patients with beta-thalassemia major and the first patient with severe sickle cell disease ever treated with our LentiGlobin BB305 product candidate. As of May 2015, Subjects 1201 and 1202 with beta-thalassemia major remained transfusion-independent for 16 and 14 months, respectively. Subject 1204 with severe SCD demonstrated increasing HbAT87Q production at six months’ follow-up and was free of transfusions for more than three months. At the six-month visit post-drug product infusion, the proportion of anti-sickling hemoglobin (HbAT87Q + HbF) in the patient with SCD accounted for 45 percent of all hemoglobin production. As of May 2015, the patient with SCD had no hospitalizations for sickle cell complications post-transplant, despite weaning of transfusions. LentiGlobin BB305 was well-tolerated, with no drug product-related adverse events observed as of the May 2015 data cut-off.

LENTIGLOBIN BETA-THALASSEMIA GLOBAL REGULATORY STRATEGY – Announced plan to pursue conditional approval of our LentiGlobin BB305 product candidate for the treatment of beta-thalassemia major in the E.U. through the Adaptive Pathways Pilot Program based on data from the ongoing Northstar and HGB-205 studies and plan to pursue accelerated approval in the U.S. based on our planned HGB-207 and HGB-208 studies. Completed NIH RAC review of HGB-207 and HGB-208 study protocols in adult and adolescent patients with beta-thalassemia major and pediatric patients with beta-thalassemia major, respectively.

IMMUNO-ONCOLOGY STRATEGY – Announced strategy to build a broad T cell-based immuno-oncology portfolio based on our immuno-oncology, gene therapy clinical development and lentiviral vector manufacturing expertise and genome editing capabilities. Revised Celgene collaboration to focus exclusively on anti-BCMA product candidates in multiple myeloma, initiated a strategic collaboration with Kite Pharma focused on second-generation T cell receptor (TCR) therapies in HPV-associated cancers and entered into an exclusive license agreement with Five Prime Therapeutics around chimeric antigen receptor (CAR) T cell therapies against an undisclosed cancer target for hematologic malignancies and solid tumors.

CHIEF SCIENTIFIC OFFICER – Hired Philip Gregory, D. Phil., as Chief Scientific Officer. Formerly Chief Scientific Officer and Senior Vice President, Research at Sangamo BioSciences, Dr. Gregory brings extensive expertise in the fields of genome editing and gene therapy.

STRENGTHENED BALANCE SHEET – Raised $477.2 million in net proceeds in an equity financing in June 2015. Our cash, cash equivalents and marketable securities are sufficient to fund our operations through 2018, based on the company’s current business plan. Proceeds from the equity financing will fund advancement of our immuno-oncology programs, development of a commercial infrastructure to support a potential conditional commercial launch of LentiGlobin in Europe, expansion of manufacturing capabilities to support ongoing and anticipated development and commercial efforts, and initiation of clinical studies of LentiGlobin in adult, adolescent and pediatric subjects with beta-thalassemia major.

Second Quarter 2015 Financial Results and Financial Guidance

Cash Position: Cash, cash equivalents and marketable securities as of June 30, 2015 were $936.4 million, compared to $492.0 million as of December 31, 2014, an increase of $444.4 million, which was primarily driven by the June 2015 equity financing.
Revenues: Collaboration revenue was $4.9 million for the second quarter of 2015 compared to $6.3 million for the second quarter of 2014. Collaboration revenue is primarily comprised of the amortization of deferred revenue related to our collaboration agreement with Celgene.

R&D Expenses: Research and development expenses were $44.3 million for the second quarter of 2015, compared to $13.9 million for the same period in 2014, an increase of $30.4 million. The increase in research and development expenses was primarily attributable to an $11.0 million increase in stock-based compensation expense, of which $8.5 million is non-recurring, a $10.7 million increase in one-time in-license milestones and fees, and an increase in expenses necessary to support the advancement of our clinical and pre-clinical programs.

G&A Expenses: General and administrative expenses were $10.7 million for the second quarter of 2015, compared to $5.7 million for the same period in 2014, an increase of $5.0 million. The increase in general and administrative expenses was primarily attributable to a $3.5 million increase in employee- and contractor-related costs to support our overall growth.
Net Loss: Net loss was $51.8 million for the second quarter of 2015, compared to net loss of $1.5 million for the second quarter of 2014.

Financial guidance: bluebird bio expects that its cash, cash equivalents and marketable securities of $936.4 million as of June 30, 2015 will be sufficient to fund its operations through 2018, based on the company’s current business plan.

On August 6, 2015 Synta Pharmaceuticals Corp. (NASDAQ: SNTA) reported financial results for the second quarter ended June 30, 2015 and provided a pipeline update (Press release, Synta Pharmaceuticals, AUG 6, 2015, View Source;p=RssLanding&cat=news&id=2076498 [SID:1234507077]).

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"The ganetespib development program is approaching its first key milestone, with the Phase 3 GALAXY-2 trial in non-small cell lung cancer nearing its first interim analysis, which is anticipated by year end, followed by the second interim and final analyses expected in 2016," said Chen Schor, President and Chief Executive Officer of Synta. "A positive outcome of this trial has the potential to be transformational for Synta, bringing us closer to our goal of making this novel therapeutic with a unique mechanism of action available to non-small cell lung cancer patients in need of additional treatment options. Ganetespib is also being evaluated in a series of large, randomized investigator-sponsored studies for other indications, including AML, ovarian cancer and breast cancer, and we continue to move the lead candidate from our HDC program, STA-12-8666, toward the clinic. Each of these programs continues to make important progress toward value-creating milestones, and we look forward to providing updates in the months ahead."

Second Quarter Accomplishments and Recent Updates

Pivotal, Phase 3 GALAXY-2 Clinical Trial Remains on Track for Interim Analysis of Overall Survival in 2015. The Company’s pivotal GALAXY-2 trial, a Phase 3 global, randomized, multi-center study comparing the combination of ganetespib and docetaxel to docetaxel alone for the second-line treatment of advanced non-small cell lung adenocarcinoma, remains on track to meet previously provided data readout timelines. Ganetespib, the Company’s lead program, is a novel, potent small molecule inhibitor of heat shock protein 90 (Hsp90). Based on current projections and statistical assumptions, the Company expects that the first interim overall survival (OS) analysis of GALAXY-2 will be conducted by the end of 2015, and the second interim and final OS analysis will be conducted in 2016. Assuming positive interim results from the ongoing GALAXY-2 trial of ganetespib, and pending regulatory feedback, the Company plans to seek regulatory approval of ganetespib for NSCLC in 2016.

Results from the Phase 2 GALAXY-1 trial published in Annals of Oncology. Results from the Company’s Phase 2 GALAXY-1 trial were published in the May 21, online first issue of the journal Annals of Oncology. GALAXY-1 was a global, randomized, multi-center study designed to identify the patients with advanced NSCLC most likely to benefit from second-line treatment with ganetespib in combination with docetaxel versus docetaxel alone. The results from this trial demonstrated that patients diagnosed with advanced non-small cell lung adenocarcinoma more than six months prior to study entry derived the most benefit from combination treatment, leading to the selection of this population for the ongoing Phase 3 GALAXY-2 trial.

First patient enrolled in Phase 2 Portion of GANNET53 Study of ganetespib in ovarian cancer. In June, Synta announced commencement of patient enrollment in the Phase 2 portion of the GANNET53 study, a randomized, pan-European study evaluating ganetespib in combination with paclitaxel vs. paclitaxel alone in over 200 patients with metastatic, predominantly p53 mutant, platinum-resistant ovarian cancer. Enrollment in the Phase 2 portion of GANNET53 follows the successful completion of the Phase 1 portion, the results of which were recently presented at the 2015 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting in Chicago. The Phase 1 data demonstrated that the combination of ganetespib 150 mg/m² with paclitaxel 80 mg/m² once weekly for 3 out of 4 weeks was generally well tolerated, with no dose limiting toxicities, and was therefore chosen for the randomized phase 2 trial. GANNET53 is sponsored by Innsbruck Medical University in Austria and funded by the European Commission.

Results from three investigator-sponsored trials of ganetespib and preclinical results of STA-12-8666 presented at ASCO (Free ASCO Whitepaper). Promising results from three studies evaluating ganetespib combination therapy in ALK-positive lung cancer, platinum-resistant ovarian cancer, and rectal cancer were presented at the 2015 ASCO (Free ASCO Whitepaper) Annual Meeting. In addition, preclinical results for the Company’s lead HDC candidate, STA-12-8666, in pediatric sarcoma were also presented at this year’s ASCO (Free ASCO Whitepaper) Annual Meeting. STA-12-8666 is a conjugate of an Hsp90 inhibitor and SN-38, the active metabolite of the widely used drug irinotecan. The Company remains on track for an IND submission by the first quarter of 2016 to begin clinical studies of STA-12-8666.
Second Quarter 2015 Financial Results

There were no revenues recognized in the second quarters of 2015 and 2014.

Research and development expenses were $16.4 million for the second quarter in 2015, compared to $18.8 million for the same period in 2014. General and administrative expenses were $3.1 million for the second quarter in 2015, compared to $2.9 million for the same period in 2014.

The Company reported a net loss of $19.8 million, or $0.15 per basic and diluted share, in the second quarter of 2015, compared to a net loss of $22.3 million, or $0.24 per basic and diluted share, for the same period in 2014.

As of June 30, 2015, the Company had $98.3 million in cash, cash equivalents and marketable securities, compared to $97.7 million in cash, cash equivalents and marketable securities as of December 31, 2014.

More detailed financial information and analysis may be found in the Company’s Quarterly Report on Form 10-Q, which was filed with the Securities and Exchange Commission (SEC) on August 6, 2015.

Guidance

The Company expects its cash, cash equivalents and marketable securities of approximately $98.3 million as of June 30, 2015 will be sufficient to fund operations at least through the first half of 2016. This estimate assumes no additional funding from new partnership agreements, equity financings or further sales under its ATM facility. The timing and nature of certain activities contemplated for the remainder of 2015 and 2016 will be conducted subject to the availability of sufficient financial resources.

On Ausgt 6, 2015 Epizyme, Inc. (NASDAQ:EPZM), a clinical stage biopharmaceutical company creating novel epigenetic therapies for cancer patients, reported business highlights and operating and financial results for the second quarter of 2015 (Press release, Epizyme, AUG 6, 2015, View Source [SID:1234507072]).

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"As we enter the third quarter of 2015, Epizyme is in a strong position. Having regained global rights ex-Japan to tazemetostat, our lead clinical candidate, we are actively moving the program forward and expanding our clinical development activities," said Robert Gould, Ph.D., President and Chief Executive Officer, Epizyme. "The company made significant progress advancing tazemetostat during the quarter. Importantly, we initiated the phase 2 NHL study and completed the transition of development-related transition activities from Eisai. Beyond tazemetostat, we look forward to working with Celgene on the three HMT targets defined under our renewed collaboration agreement. We are on strong financial footing and are well positioned to advance the development of our clinical programs and platform. As we announced yesterday, we have selected Rob Bazemore to succeed me as President and Chief Executive Officer, positioning us for continued success into the future."

Program Summaries

Tazemetostat (EPZ-6438):

In the second quarter of 2015, Epizyme initiated a phase 2 monotherapy trial of its lead clinical candidate, tazemetostat, in patients with relapsed or refractory non-Hodgkin lymphoma (NHL). This five-arm study will enroll up to 150 patients with germinal center diffuse large B cell lymphoma (DLBCL) or follicular lymphoma, stratified by those expressing mutant EZH2 and those expressing wild type EZH2, as well as patients with non-germinal center DLBCL. The initial data from this study is expected in mid-2016.

The phase 1 study in relapsed or refractory NHL and advanced solid tumors is ongoing, with enrollment complete in the dose escalation and dose expansion cohorts. Enrollment in the clinical pharmacology portion of the study is ongoing. Epizyme will present updated data from patients with advanced solid tumors in the phase 1 study at ESMO (Free ESMO Whitepaper)’s European Cancer Congress in Vienna, Austria on September 26. Additional data from patients with NHL in the phase 1 study are expected to be presented at a medical meeting before the end of 2015. Results from the phase 1 trial presented at the International Congress on Malignant Lymphoma on June 20 showed tazemetostat as a monotherapy produced durable objective responses in heavily pre-treated patients with relapsed or refractory NHL, with an acceptable safety and tolerability profile.

Epizyme intends to initiate a phase 1 clinical study in pediatric patients with INI1-negative tumors or synovial sarcoma and a phase 2 clinical study in adult patients with INI1-negative tumors or synovial sarcoma in the second half of 2015.

Pinometostat (EPZ-5676):

Epizyme will voluntarily cease patient enrollment into the phase 1 study of pinometostat in adult patients with MLL-rearranged acute leukemia in the third quarter of 2015. The decision, made together with Celgene, is based on insufficient efficacy seen to date with monotherapy treatment in this population. The company expects to present final study results after all patients conclude treatment and data analyses are complete. A separate dose-escalation study of pinometostat in pediatric patients is ongoing and enrollment is expected to be completed in the second half of 2015.

Epizyme and Celgene plan to explore pinometostat in combination with other agents based on encouraging preclinical data.

Celgene collaboration update

Subsequent to the second quarter, Epizyme amended and restated its agreement with Celgene Corporation to extend the research collaboration between the two companies for at least three additional years. Epizyme received a $10 million upfront payment in exchange for an extension of Celgene’s option rights to individually license global rights for two histone methyltransferase (HMT) targets and ex-US rights for a third HMT target. Celgene may exercise its option with respect to each of the targets at the time of the IND filing for a pre-specified license payment. Following the completion of phase 1, if Celgene chooses to continue its license for a specific target, it may do so by making an additional pre-specified license payment.

Epizyme will be responsible for leading and funding development for each target candidate through phase 1 clinical trials. Epizyme may earn total potential milestones of up to $610 million on the three targets, including up to $75 million in development milestones and license fees, $365 million in regulatory milestones, and $170 million in sales milestones. Epizyme also may earn a royalty of up to a low double-digit percentage on worldwide net product sales relating to two of the targets, and on ex-US annual net sales relating to the third target. Epizyme retains global rights to the remainder of its preclinical pipeline.

Second Quarter 2015 Financial Results

Collaboration Revenue: Collaboration revenue was $0.7 million in the second quarter of 2015 and $1.6 million for the six months ended June 30, 2015 compared with $9.5 million and $22.9 million in the comparable periods of 2014. The decline in collaboration revenue primarily reflects the completion of our research obligations under the Eisai agreement by the end of 2014 and under the GSK agreement by January 2015, as well as a decrease in revenue recognized under the Celgene agreement due to the Company’s satisfaction of certain of its performance obligations under the agreement during Q4 2014.

R&D Expenses: Research and development expenses were $20.6 million for the second quarter 2015 and $77.6 million for the six months ended June 30, 2015 compared to $17.5 million and $32.8 million for the comparable periods of 2014. The expansion of tazemetostat clinical trials and related EZH2 activities and the $40.0 million upfront payment to Eisai in the first quarter of 2015 drove the increase in spending in comparison to the three and six months ended June 30, 2014. Epizyme expects development expenses will continue to increase in 2015 as compared to 2014 since the Company is now solely responsible for funding tazemetostat clinical trials and related development costs outside of Japan.

G&A Expenses: General and administrative expenses were $6.0 million for the second quarter 2015 and $11.2 million for the six months ended June 30, 2015 compared with $5.3 million and $10.3 million in the comparable periods in 2014. The increase in G&A expense was largely related to the increased infrastructure to support the expanding clinical development program and an increase in patent filings. We expect G&A expense to increase slightly as compared to current spending levels for the remainder of 2015.

Net Loss: Net loss was $25.8 million in the second quarter 2015 and $87.1 million for the six months ended June 30, 2015 compared with $13.4 million and $20.3 million in the comparable periods in 2014.

Cash and Cash Equivalents: Cash and cash equivalents as of June 30, 2015 were $236.7 million, compared with $190.1 million as of December 31, 2014. Epizyme’s follow-on public offering in March 2015 raised $117.0 million in proceeds before expenses and the exercise of the underwriters’ over-allotment option provided an additional $13.7 million in proceeds before expenses. The company received an upfront payment of $10.0 million under the amended and restated collaboration and license agreement with Celgene in July 2015. The company expects that, based on its current operating plan, cash and equivalents will be sufficient to fund its operating expenses and capital expenditure requirements through at least the end of the second quarter of 2017 prior to including any potential license fees or future milestone payments.

Shares Outstanding: Shares outstanding as of June 30, 2015 were 41.2 million. Weighted average shares outstanding were 41.1 million and 38.1 million for the three and six months ended June 30, 2015 respectively and 33.2 million and 32.1 million for the comparable periods in 2014.