On August 4, 2015 OXiGENE, Inc. (Nasdaq:OXGN), a biopharmaceutical company developing novel therapies for treatment of cancer, reported financial results for the quarter ended June 30, 2015 (Press release, OXiGENE, AUG 4, 2015, View Source [SID:1234507006]).

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For the second quarter of 2015, OXiGENE reported a net loss of $3.3 million compared to a net loss of $3.9 million for the comparable period in 2014. R&D expenses during the second quarter of 2015 were $2.0 million compared to $2.2 million in the second quarter of 2014. General and administrative expenses during the second quarter of 2015 were $1.3 million compared to $1.8 million in the second quarter of 2014.

At June 30, 2015, OXiGENE had cash of $33.1million, compared to $30.0 million at December 31, 2014.

"I believe we have multiple opportunities to leverage our investigational products’ unique and demonstrated ability to block blood flow to various cancer tumors, particularly in combination with other antivascular therapies. As I mentioned last quarter, before the end of the year I look forward to presenting a clear development path for our future that we believe will optimize our pipeline assets," said William D. Schwieterman, M.D., OXiGENE’s President and CEO.

OXiGENE also noted that it anticipates several upcoming regulatory and clinical milestones before the end of 2015. The company expects to submit a Special Protocol Assessment to the U.S. Food and Drug Administration for the potential Phase 3 study of fosbretabulin in combination with bevacizumab in platinum resistant ovarian cancer. The company plans to present results of the dose-ranging portion of the Phase 1 study of fosbretabulin in combination with pazopanib in ovarian cancer. Initial results from the ongoing Phase 1 trial in gastrointestinal neuroendocrine tumors (GI-NETs) are also scheduled to be announced. In addition, the company is on track to initiate a Phase 1 / 2 study of OXi4503 in acute myeloid leukemia (AML).

On August 4, 2015 NanoString Technologies, Inc. (NASDAQ:NSTG), a provider of life science tools for translational research and molecular diagnostic products, reported financial results for the second quarter ended June 30, 2015 (Press release, NanoString Technologies, AUG 4, 2015, View Source [SID:1234507005]).

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Second Quarter Financial Highlights:

Total revenue of $13.1 million, 20% year-over-year growth
Total product and service revenue of $12.5 million, 22% year-over-year growth
Instrument revenue of $4.4 million, 17% year-over-year growth
Consumables revenue of $7.4 million, including $0.6 million of Prosigna IVD kits, 23% year-over-year growth
"Our momentum continued to build through the second quarter, with important progress toward each of our strategic objectives, including intensifying our focus on oncology and expanding our addressable markets through product launches," said President and Chief Executive Officer, Brad Gray. "We have meaningfully strengthened our immuno-oncology effort with the addition of Alessandra Cesano as our Chief Medical Officer and our collaboration with Merck on the development program for KEYTRUDA (pembrolizumab). With the launch of our new nCounter SPRINT Profiler and our initial RNA:Protein application, we have expanded our addressable market substantially and further differentiated our technology in the field of tumor profiling."

Recent Business Highlights:

Grew installed base to over 300 nCounter Analysis Systems at June 30, 2015

Launched the nCounter SPRINT Profiler to meet the needs of the individual researcher and expand the company’s addressable market

Entered collaboration with Merck to evaluate the feasibility of developing an immune-related gene expression assay for use in the development program of KEYTRUDA

Named oncologist Alessandra Cesano, M.D., Ph.D. as Chief Medical Officer

Published clinical study in Clinical Cancer Research confirming the ability of Prosigna to predict response to chemotherapy

Received favorable draft local coverage determination from the Palmetto GBA MolDx program for Medicare coverage of Prosigna and acknowledgement of Prosigna in NCCN Breast Cancer Guidelines

Second Quarter Financial Results

Revenue for the three months ended June 30, 2015 rose 20% to $13.1 million, from $10.9 million for the second quarter of 2014. Instrument revenue was $4.4 million, up 17% from the prior year period. Consumables revenue, excluding Prosigna, was $6.8 million for the second quarter of 2015, 17% higher than in the comparable 2014 quarter. Prosigna revenue was $592,000 for the quarter, and collaboration revenue totaled $568,000. Gross margin on product and service revenue was 53% for the second quarter of both 2015 and 2014.

Research and development expense increased to $5.8 million for the second quarter of 2015, versus $5.3 million for the second quarter of 2014, largely reflecting increased costs related to the development of new research products and related technology. Selling, general and administrative expense was $12.8 million for the second quarter of 2015 compared to $12.9 million for the prior year period, which reflects cost efficiencies resulting from streamlining the sales and marketing organization, partially offset by increased administration and facility costs.

Net loss for the three months ended June 30, 2015 was $12.4 million, or a loss of $0.66 per diluted share, compared with $14.1 million, or a loss of $0.78 per diluted share, for the second quarter of 2014.

Outlook for 2015:

The company is updating its financial outlook for 2015 as follows:

Total revenue in the range of $60 million to $63 million, compared to the previous range of $58 million to $61 million
Gross margin in the range of 53% to 55%, unchanged
Operating expenses in the range of $77 million to $81 million, unchanged
Operating loss in the range of $41 million to $47 million, compared to the previous range of $43 million to $49 million

On August 4, 2015 Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) reported financial results for the three and six months ended June 30, 2015, and provided an operating forecast and program updates (Filing, 8-K, Ligand, AUG 4, 2015, View Source [SID:1234507003]).

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Financial highlights for the second quarter of 2015 include:
• Total revenues were $18.4 million and royalty revenues were $6.6 million, an increase of 74% and 26%, respectively, compared with the second quarter of 2014.

• Adjusted EPS was $1.81 and GAAP EPS was $1.11.

• The company generated operating cash of $17.6 million, a significant increase over $6.6 million of operating cash generated in the second quarter of 2014.

A description of adjusted calculations and reconciliation to comparable GAAP financial measures is provided in the accompanying table titled "Adjusted Financial Measures."

"We posted strong second quarter financial results featuring growth in royalty revenues from both of our lead commercial assets, Promacta and Kyprolis, and continued strong operating cash flow. Our second quarter royalty revenue reflects product sales by partners during the first quarter and the resetting of tiered royalty rates that occurs annually on January 1st," said John Higgins, Chief Executive Officer of Ligand. "Progress reported by our partners during the second quarter and subsequent weeks has been tremendous, and includes approval of a pediatric indication for Promacta in the U.S., the start of a new global Phase 3 study with Kyprolis and FDA clearance of Kyprolis for expanded uses. With our recent transaction with Selexis, we now have more than 120 fully-funded programs and more than 70 partners."

Second Quarter 2015 Financial Results
Total revenues for the second quarter of 2015 were $18.4 million, compared with $10.6 million for the same period in 2014. Royalty revenues increased 26% to $6.6 million from $5.2 million for the same period in 2014 primarily due to higher royalties from Promacta and Kyprolis. Material sales were $10.7 million compared with $3.5 million for the same period in 2014 due to an increase in Captisol purchases for use in clinical trials and commercial products. Collaborative and other revenues were $1.1 million compared with $1.9 million for the same period in 2014 due primarily to the timing of milestones and upfront fees earned in the second quarter of 2014.

Cost of goods sold was $2.6 million for the second quarter of 2015 compared with $1.2 million for the same period in 2014, as a result of higher Captisol sales in the second quarter of 2015. Research and development expenses were $4.0 million compared with $2.7 million for the same period of 2014. The increase was primarily due to costs associated with funding internal development programs. General and administrative expenses for the second quarter of 2015 were $7.2 million, compared with $5.2 million for the same period in 2014, with the increase primarily due to costs associated with business development activities and non-cash stock-based compensation expense. During the second quarter of 2015, the Company recognized a $28.2 million gain on deconsolidation of Viking Therapeutics primarily related to the equity milestone received upon the close of Viking’s IPO.

Net income for the second quarter of 2015 was $23.6 million, or $1.11 per diluted share, compared with net income for the second quarter of 2014 of $1.6 million, or $0.07 per diluted share. Adjusted net income for the second quarter of 2015 was $38.5 million, or $1.81 per diluted share, compared with adjusted net income for the second quarter of 2014 of $5.2 million, or $0.24 per diluted share.

As of June 30, 2015, Ligand had cash, cash equivalents and short-term and restricted investments of $182.2 million.

Year-to-Date Financial Results

Total revenues for the six months ended June 30, 2015 increased 24% to $33.0 million, compared with $26.6 million for the same period in 2014. Royalty revenues increased 29% to $16.9 million from $13.1 million for the same period in 2014 primarily due to higher royalties from Promacta and Kyprolis. Material sales increased to $14.4 million from $9.2 million for the same period of 2014 due to an increase in customer purchases of Captisol for use in clinical trials and commercial products. Collaborative research and development and other revenues were $1.7 million compared with $4.3 million for the same period in 2014 primarily due to timing of upfront fees and milestones earned.

Cost of goods sold was $3.7 million for the first six months of 2015, compared with $3.6 million for the same period in 2014. While material sales were higher in the first six months of 2015 versus last year, related cost of goods sold were flat due to the mix of Captisol sales and slightly lower cost of goods sold overall. Research and development expenses for the first six months of 2015 were $8.0 million, compared with $5.8 million for the same period in 2014. The increase was primarily due to costs associated with funding internal development programs and non-cash stock-based compensation expense. General and administrative expenses for the first six months of 2015 were $13.2 million compared with $10.3 million for the same period of 2014. The increase is primarily due to costs associated with business development activities and non-cash stock-based compensation expense.

Net income for the first six months of 2015 was $24.3 million, or $1.16 per diluted share, compared with net income of $3.7 million, or $0.17 per diluted share, for the same period in 2014. Adjusted net income for the first six months of 2015 was $45.4 million, or $2.16 per diluted share, compared with adjusted net income of $12.5 million, or $0.57 per diluted share, in the same period of 2014.

Full-Year and Third Quarter 2015 Financial Forecast

The Company affirms expectations for full-year 2015 total revenues to be between $81.0 million and $83.0 million, and adjusted earnings per diluted share to be between $3.45 and $3.50.

For the second half of 2015, Ligand expects total revenues to be between $48.0 million and $50.0 million, and adjusted earnings per diluted share to be between $1.29 and $1.34. Approximately one-third of this second half revenue and earnings outlook is projected for the third quarter. Adjusted earnings per diluted share guidance excludes changes in contingent liabilities, mark-to-market adjustment for amounts owed to licensors, non-cash stock-based compensation expense, non-cash debt-related costs and pro-rata non-cash net losses of Viking Therapeutics.

Second Quarter and Recent Business Highlights

Partnered Program Progress

Promacta/Revolade

• Novartis announced FDA approval of Promacta (eltrombopag) for the treatment of children six years and older with chronic immune thrombocytopenia (cITP) who have had an insufficient response to corticosteroids, immunoglobulins or splenectomy.

• Novartis announced that Promacta is now approved in more than 100 countries worldwide for the treatment of adults with cITP.

• Novartis announced that the CHMP adopted a positive opinion for Revolade (eltrombopag), for the treatment of adults with acquired severe aplastic anemia (SAA) who were either refractory to prior immunosuppressive therapy or heavily pretreated and are unsuitable for hematopoietic stem cell transplantation. The European Commission will review the CHMP recommendation and is expected to deliver its final decision within three months.

Kyprolis

• Amgen announced FDA approval of the sNDA for Kyprolis for injection in combination with Revlimid and dexamethasone for the treatment of patients with multiple myeloma who have received one to three prior lines of therapy. The FDA approved the expanded indication for Kyprolis based on data from the ASPIRE study which showed that patients treated in the Kyprolis arm lived 50% longer (8.7 months longer) without their disease worsening compared with patients treated with Revlimid and low-dose dexamethasone alone.

• Amgen announced initiation of the ARROW trial, a global Phase 3 study evaluating the benefit of Kyprolis administered once-weekly with dexamethasone versus the current FDA approved twice-weekly administration schedule in patients with relapsed and refractory multiple myeloma who have received prior treatment with bortezomib and an immunomodulatory agent.

• Amgen announced the submission of the sNDA for Kyprolis in patients with relapsed multiple myeloma who have received at least one prior therapy. The filing was based on data from the Phase 3 head-to-head ENDEAVOR study showing relapsed multiple myeloma patients treated with Kyprolis lived twice as long as those treated with Velcade (18.7 vs. 9.4 months) without the disease worsening.

• Amgen announced completion of enrollment in the Phase 3 CLARION study of Kyprolis versus Velcade in newly diagnosed multiple myeloma patients.

Additional Pipeline and Partner Developments

• SAGE Therapeutics announced initiation of a Phase 3 open-label expanded access protocol (study 302), designed to evaluate the safety of SAGE-547 in patients with super-refractory status epilepticus (SRSE). In conjunction with this event, Ligand earned a $500,000 milestone payment.

• SAGE Therapeutics announced that SAGE-547 demonstrated robust activity, with a 77% response rate in evaluable patients with SRSE, in a successfully completed Phase 1/2 clinical trial.

• Spectrum Pharmaceuticals presented data at the 2015 meeting of the American Pharmacists Association showing superior solution stability of EVOMELA over Alkeran (melphalan containing propylene glycol as a co-solvent). EVOMELA was shown to be stable for four hours at room temperature and for up to 48 hours in refrigerated conditions after preparation of infusion solution.

• TG Therapeutics announced the first presentation of preclinical data demonstrating single-agent and combination activity with two of Ligand’s IRAK4 inhibitor compounds under development. The data demonstrated that:

• Both IRAK4 inhibitor compounds not only inhibited cell proliferation but also induced apoptosis as single agents in various B-cell lymphoma cell lines, potentially elucidating the mechanism of action of and clinical rationale for IRAK4 inhibition.

• Both compounds demonstrated marked synergy when combined with the novel targeted kinase inhibitors TGR-1202, TG’s proprietary PI3K delta inhibitor, and with the BTK inhibitor ibrutinib.

• Merrimack Pharmaceuticals announced final clinical results for the Phase 1 study of MM-302 in HER2-positive metastatic breast cancer. Results from the trial showed that the group of patients treated with 30 mg/m2 or more of MM-302 alone, in combination with trastuzumab or with trastuzumab and cyclophosphamide, had a median progression free survival (mPFS) of 7.6 months (95% CI: 3.6-10.9 months) and an overall response rate (ORR) of 11%. Of note, 25 patients who had not been previously treated with anthracyclines had an mPFS of 11 months (95% CI: 1.8-13.1 months) and an ORR of 24%.

• Viking Therapeutics closed its IPO in May 2015. Ligand is partnered with Viking on five therapeutic programs including SARM (VK5211) and TR-beta (VK2809).

• Viking announced the submission of an IND for development of VK5211 in patients with acute hip fracture. Initial studies will evaluate the safety profile of VK5211 in healthy elderly subjects. The trial will enroll approximately 120 subjects and will evaluate the effects of VK5211 on lean body mass after 12 weeks of treatment.

• Viking announced plans to conduct a Phase 2 trial of VK2809 in patients with hypercholesterolemia and fatty liver disease in the fourth quarter of 2015. The trial will evaluate the efficacy, safety and tolerability of VK2809 in approximately 100 patients with elevated LDL cholesterol and fatty liver disease.

New Licensing Deals

• Ligand entered into a worldwide agreement with Sanofi for the development and commercialization of SAR-125844, a Captisol-enabled program. Ligand will receive undisclosed milestones, tiered royalties and revenue from Captisol material sales. Sanofi is responsible for all development costs relating to the program.

• Ligand entered into a new clinical-stage agreement with AiCuris GmbH & Co for an undisclosed anti-infective Captisol-enabled program.

Recent Acquisition

• Ligand acquired financial rights to potential future milestones and royalties for more than 15 development programs from Selexis SA for $4 million in cash. The acquired programs include a mix of novel biologics and biosimilars. The programs are in various stages of development ranging from preclinical through Phase 3. Each acquired program is fully funded by a development partner. The acquisition expands Ligand’s portfolio to more than 120 fully-funded assets and increases the number of partners to more than 70. Ligand previously acquired a portfolio of biologic development programs from Selexis in April 2013.

Internal GRA Program Progress

• Ligand announced results from a Phase 1b clinical trial with LGD-6972 that demonstrated favorable safety, tolerability and pharmacokinetics in normal healthy volunteers and in subjects with type 2 diabetes mellitus. The trial results also demonstrated a robust, dose-dependent reduction of fasting plasma glucose.

• The molecule is believed to be best-in-class in the GRA (glucagon receptor antagonist) field of diabetes research.

Recent Intellectual Property Expansion

• Ligand added to the Captisol patent portfolio with another patent grant in Europe. Ligand also had patents recently allowed or granted in the U.S. and China for Captisol-enabled clopidogrel and in Mexico for Captisol-enabled budesonide.

• Ligand also had recent allowances in the U.S. for its GRA, SARM and EPO receptor agonist portfolios.

Adjusted Financial Measures

The adjusted financial measures discussed above and in the tables below for the three and six months ended June 30, 2015 and 2014 exclude changes in contingent liabilities, mark-to-market adjustment for amounts owed to licensors, non-cash stock-based compensation expense, non-cash debt-related costs and pro-rata non-cash net losses of Viking Therapeutics.

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

On August 4, 2015 Aptose Biosciences Inc. (NASDAQ:APTO) (TSX:APS) ("Aptose" or the ‘Company") a clinical-stage company developing new therapeutics and molecular diagnostics that target the underlying mechanisms of cancer, reported financial results for the three months ended June 30, 2015 and provided a corporate update (Filing, 6-K, Aptose Biosciences, AUG 4, 2015, View Source [SID:1234507001]). Unless specified otherwise, all amounts are in Canadian dollars.

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Effective July 15, 2014 the Company changed its fiscal year end from May 31 to December 31. As a result of this change, the current interim period being reported is for the three months ended June 30, 2015, while the prior year comparative period is for the three months ended May 31, 2014.

Net loss for the three months ended June 30, 2015 was $3.4 million ($0.28 per share) compared with $4.2 million ($0.49 per share) during the three months ended May 31, 2014. Total cash and cash equivalents and investments at June 30, 2015 were $25.2 million.

"During the second quarter we were focused on advancing our Phase 1b clinical trial of APTO-253 for AML and other blood cancers, as we expanded the internal clinical operations capabilities, expanded the scope of preeminent investigators and centers associated with the development of this program, and initiated preclinical collaborations to explore combination treatment strategies with other drug developers. APTO-253 displays a mechanism of action that is well-differentiated and potentially complementary to currently available therapies," said William G. Rice, Ph.D., Chairman, President and Chief Executive Officer. "We are making progress in building a specialized oncology drug development organization dedicated to translating new understandings in transcriptional regulation and epigenetics into advanced medicines such as APTO-253 for patients with hematological malignancies."

Corporate Highlights

In June, Aptose announced that the U.S. Food and Drug Administration (FDA) granted the company orphan drug designation for APTO-253 for the treatment of acute myeloid leukemia (AML). Orphan drug status provides research and development tax credits, an opportunity to obtain grant funding, exemption from FDA application fees and other benefits. If APTO-253 is approved to treat AML, the orphan drug designation provides Aptose with seven years of marketing exclusivity.

During the quarter, Aptose continued to recruit clinical sites for the APTO-253 Phase 1b clinical trial. Baylor Cancer Center in Dallas, MD Anderson Cancer Center in Houston, Oregon Health & Sciences University (OHSU) and the University of Michigan are actively screening patients. Two additional clinical sites are undergoing IRB approvals and are expected to be active in the third quarter of this year.

Aptose and its collaborators have submitted two abstracts for presentation at the American Society of Hematology (ASH) (Free ASH Whitepaper) ("ASH") Meeting, planned for December 5-8th, 2015 in Orlando, Florida. Aptose’s collaborator, Oregon Health and Sciences University ("OHSU"), as part of the Beat AML Initiative, has submitted an abstract evaluating the efficacy of APTO-253 as a single agent and in combination with other agents in primary cells from patients with various hematologic malignancies, including AML, myelodysplastic syndromes (MDS), chronic myelogenous leukemia (CML) and chronic lymphocytic leukemia (CLL). Additionally, Aptose has submitted an abstract on the preclinical pharmacology and clinical pharmacokinetics of APTO-253. Aptose believes that such data provide a rationale for the expectation of potential single agent efficacy against AML in the clinical setting.
Financial Results

Net loss for the three months ended June 30, 2015 was $3.4 million ($0.28 per share) compared with $4.2 million ($0.49 per share) during the three months ended May 31, 2014. Net loss for the six months ended June 30, 2015 was $6.9 million ($0.59 per share) compared with $6.7 million ($0.97 per share) during the six months ended May 31, 2014.

The decrease in net loss during the three months ended June 30, 2015 in comparison to the three months ended May 31, 2014 is due to lower general and administrative costs resulting from lower legal and patent costs, lower Board fees and severance costs incurred in the prior year related to our former President and COO, as well as increased finance income in the current year quarter related to a gain on US dollar cash balances during the period. These decreases were partially offset by higher research and development costs in the current year associated with increased clinical activity on APTO-253 and associated activities.

The increase in net loss during the six months ended June 30, 2015 compared with the six-month period ended May 31, 2014 is due to higher research and development activities associated with the development of APTO-253, as well as higher general and administrative costs related to higher stock based compensation expense, our NASDAQ listing and related expenses and clean-up and moving costs related to the Toronto office and lab relocation. These increases in expenditures were partially offset by increased finance income associated with foreign currency gains on our US dollar cash balances.

Aptose utilized cash of $4.3 million in its operating activities in three-month period ended June 30, 2015 compared with $3.9 million during the three months ended May 31, 2014. For the six months ended June 30, 2015 we utilized cash of $6.5 million compared with $6.1 million in the six months ended May 31, 2014. The cash utilized in the three-month period is higher than the three months ended May 31, 2014 despite a lower net loss due to cash used to reduce accounts payable and accrual balances in the current year period.

At June 30, 2015, the Company had cash and cash equivalents and investments of $25.2 million compared to $30.5 million at December 31, 2014.

Research and Development

Research and development expenses totaled $1.3 million in the three months ended June 30, 2015 compared to $1.0 million during the three months ended May 31, 2014 and totaled $2.2 million for the six- month period ended June 30, 2015 compared with $1.6 million in the six months ended May 31, 2014. Research and development costs consist of the following:

Components of research and development expenses:

Research and development costs in the three months ended June 30, 2015 increased compared with the three months ended May 31, 2014 primarily due to increased APTO-253 development costs including the ongoing Phase 1b clinical trial of APTO-253 in the current year period compared with no ongoing clinical development in the prior year period. In addition we have initiated studies to optimize the formulation of APTO-253 for which no comparable work was ongoing in the prior year period. Increased program expenditures were partially offset by no severance costs in the three months ended June 30, 2015 compared with $326 thousand in the three months ended May 31, 2014 related to severance payments made to our former President and COO. There were no deferred share units outstanding in the three months ended June 30, 2015 compared with a reduction in the fair value of units outstanding in the three months ended May 31, 2014.

The increase in research and development costs during the six months ended June 30, 2015 is the result of increased APTO-253 development costs primarily related to the ongoing Phase 1b clinical trial and associated activities including formulation studies and research support. Increased program expenditures were offset by no severance costs in the six months ended June 30, 2015 compared with $326 thousand in the six months ended May 31, 2014 related to severance payments made to our former President and COO.

Aptose anticipates an increase in research and development costs in the second half of 2015 due to the continuation of our Phase 1b clinical trial.

General and Administrative

General and administrative expenses totaled $2.5 million in the three-month period ended June 30, 2015 compared to $3.2 million in the three months ended May 31, 2014. For the six-month period ended June 30, 2015, general and administrative expenses were $5.2 million compared with $4.9 million in the six months ended May 31, 2014. General and administrative expenses consist of the following:

Components of general and administrative expenses:

General and administrative expenses excluding salaries decreased in the three months ended June 30, 2015 compared with the three months ended May 31, 2014. The decrease over the prior year is attributable to lower legal and patent costs and lower Board fees due to a change in annual payment structure.

General and administrative expenses excluding salaries increased in the six months ended June 30, 2015 compared with the six months ended May 31, 2014. The decreases incurred in the three months ended June 30, 2015 were partially offset by higher expenses in the three months ended March 31, 2015 related to our NASDAQ listing and related expenses and clean-up and moving costs related to the Toronto office and lab relocation.

Salary charges in the three and six months ended June 30, 2015 were consistent with the three- and six- month periods ended May 31, 2014 as staffing levels were consistent year over year.

Severance costs were incurred in the three and six months ended May 31, 2014 as our former President and COO left in March 2014. There are no ongoing costs related to the severance payments.

Stock-based compensation costs increased in both the three and six months ended June 30, 2015 compared with the three month and six months ended May 31, 2014 due to large option grants in April, June and July 2014 which vest 50% during the first year and therefore contribute to higher stock-based compensation expense during the first twelve month period.

Deferred share unit costs relate to the market to market adjustment on units which were settled in April 2014. There were no deferred share units outstanding in the six-month period ending June 30, 2015.

On August 4, 2015 Endocyte, Inc. (NASDAQ:ECYT), a leader in developing targeted small molecule drug conjugates (SMDCs) and companion imaging agents for personalized therapy, reported financial results for the second quarter ending June 30, 2015, and provided a clinical update (Press release, Endocyte, AUG 4, 2015, View Source [SID:1234506999]).

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"We are pleased with our continued success in escalating the dose of our folate and PSMA-targeted tubulysin SMDCs," said Ron Ellis, Endocyte’s president and chief executive officer. "Increasing the activity of our agents through higher doses and the use of a more potent drug payload were two key elements of our second generation SMDC strategy. We also continue to hone our patient selection process through refining our use of imaging agents to define targeted patients. We believe that all of these adjustments will increase the likelihood of success as we expand our trials for EC1456 and EC1169, once we determine the maximum tolerated dose."

"We were also pleased to announce today the appointment of Alison Armour, M.D. to the position of Chief Medical Officer," added Mr. Ellis. "Alison strengthens the team at Endocyte with her tremendous experience in both clinical practice and oncology drug development. Her leadership has been directly responsible for the regulatory approval of oncology therapies in the United States and international markets. We are very excited to engage her in the development of our pipeline of SMDCs and diagnostic imaging agents." Dr. Armour was most recently the VP of Oncology at Novartis and GSK.

The Company also announced that the final overall survival results from the Phase 2 TARGET trial of EC145 in NSCLC have been accepted for oral presentation at the IASLC World Conference on Lung Cancer to be held in Denver from September 6-9, 2015. While development efforts have focused on the second generation SMDCs, results of this trial provide insights into the effectiveness of the SMDC platform, particularly in targeting the folate receptor.

Second Quarter 2015 Financial Results

Endocyte reported a net loss of $10.6 million, or $0.25 per basic and diluted share, for the second quarter of 2015, compared to net income of $22.4 million, or $0.54 per basic share and $0.52 per diluted share, for the same period in 2014. The second quarter of 2014 included the recognition of the balance of deferred revenue related to the former collaboration with Merck.

Research and development expenses were $6.7 million for the second quarter of 2015, compared to $19.0 million for the same period in 2014. The decrease in research and development expense was primarily attributable to a decrease in expenses related to the TARGET trial, which is now completed, and the PROCEED trial, which was terminated in May 2014 and for which a termination charge of $4.7 million was recorded in the second quarter of 2014, along with a decrease in manufacturing expenses for vintafolide and etarfolatide related to pre-commercial activity.

General and administrative expenses were $4.1 million for the second quarter of 2015, compared to $8.0 million for the same period in 2014. The decrease in expenses was primarily attributable to a reduction in headcount and ceasing all commercial activities during the second quarter of 2014 following the withdrawal of the marketing applications in Europe.

Cash, cash equivalents and investments were $188.6 million at June 30, 2015, compared to $219.2 million at June 30, 2014, and $206.8 million at December 31, 2014.

Financial Expectations

The Company reiterated its expectation that its 2015 year-end cash balance will exceed $155 million. Spending is expected to increase from current levels as the trials for EC1456 and EC1169 are expanded once the maximum tolerated doses are determined.