On July 30, 2015 Navidea Biopharmaceuticals, Inc. (NYSE MKT: NAVB), reported financial results for the second quarter of 2015 (Press release, Navidea Biopharmaceuticals, JUL 30, 2015, View Source;p=RssLanding&cat=news&id=2072795 [SID:1234506761]). Navidea reported total revenue for the second quarter of 2015 of $2.9 million, including Lymphoseek (technetium Tc 99m tilmanocept) injection sales revenue of $2.0 million. The net loss from operations was $3.8 million and the net loss attributable to common stockholders was $9.7 million.

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"During the first half of this year we successfully undertook a strategy to transform the Company and we have been executing to that plan," commented Rick Gonzalez, Navidea’s President and CEO. "We deployed a new commercial strategy, overhauled the Lymphoseek brand plan reflective of the brand’s clinical value proposition, optimized operational efficiencies across the organization, strengthened our financial position and made progress in a cost-effective fashion to expand our development pipeline of both imaging and therapeutic programs. Today we are on a clear path, whereby our revenue growth is quickly converging with our reduced operating expenses, getting us closer to the goal of achieving cash flow breakeven in the first quarter of next year."

Specific events and milestones achieved since the beginning of the second quarter include the following:

Commercial

Achieved sequential quarter-on-quarter Lymphoseek revenue growth and continued improvement in key performance indicators;
Fully deployed a Lymphoseek-dedicated field force mid-second quarter;
Exercised pricing leverage, as per plan, resulting in a 39% Lymphoseek price increase beginning July 31st;
Reported positive Lymphoseek comparative results from an injection site pain study in breast cancer presented at the 2015 Society of Nuclear Medicine and Molecular Imaging annual meeting;

Lymphoseek Lifecycle Management

Awarded NIH grants to explore new applications of the Manocept platform for cardiovascular disease and rheumatoid arthritis (RA) totaling up to $2.0 million;

Received confirmation of continued development funding under part 2 of a previously awarded NIH grant for Lymphoseek in cervical cancer totaling $1.5 million;

Reported clinical imaging data demonstrating Tc 99m tilmanocept localizes in Kaposi’s sarcoma (KS) tumor lesions including brain lesions;

Verified Manocept CD206-targeting mechanism of action with publication in peer-reviewed Journal of Immunology providing clear clinical differentiation from other non-targeted agents and showing future potential for the delivery of therapeutics for cancer and other macrophage-dependent diseases;

Operational & Financial

Reduced cash burn by over 40% for the first half of 2015 compared to the first half of 2014;
Secured approximately $18 million in additional net capital;
Completed the divestiture of the Company’s investigational imaging agent for the detection of Parkinson’s disease;
Continued partnering/divestiture efforts for the Company’s investigational imaging agent, NAV4694, for the detection of amyloid plaques in Alzheimer’s disease;

Therapeutic & Diagnostic Development Pipeline

Reported data demonstrating that a Manocept-Doxorubicin (MT-1001) conjugate selectively targets tumor-associated macrophages and destroys the cells through an apoptotic mechanism;
Formed a research collaboration with BIND Therapeutics to engineer CD206 targeted nanoparticles using Manocept;
Reported positive Manocept proof-of-concept data demonstrating the potential for the Manocept platform as a diagnostic and therapeutic for rheumatologic conditions; and,
Received confirmation of continued NIH-grant funding for clinical trials of NAV4694 in Alzheimer’s Disease and Mild Cognitive Impairment totaling $1.7 million.

Financials

Total revenues for the quarter ended June 30, 2015 were $2.9 million compared to $1.1 million in the second quarter of last year. Second quarter 2015 product revenues recognized from the sale of Lymphoseek were $2.0 million, compared to $1.8 million in the first quarter of 2015 and $1.0 million in the second quarter of last year. During the second quarter of 2015, the Company also reported $904,000 in grant, licensing and other revenue. For the six months ended June 30, 2015, Navidea’s total revenue was $5.0 million compared to $1.8 million for the same period in 2014, an increase of 172%. The primary driver of this increase was revenues recognized from the sale and license of Lymphoseek which exceeded $4.1 million for the six months ended June 30, 2015 compared to $1.7 million for the same period last year.

Gross margins on Lymphoseek product sales grew to 83% for the second quarter of 2015 compared to 74% for the second quarter of 2014 due in part to our success in lowering our manufacturing costs coupled with our ability to sell certain previously reserved inventory.

Research and development (R&D) expenses for the second quarter of 2015 were $2.3 million, compared to $5.1 million in the second quarter of last year. R&D expenses were $6.3 million for the six months ended June 30, 2015 compared to $10.3 million in the same period of 2014. The net decreases in R&D expenses were primarily a result of decreased project costs related to the Company’s neuro assets coupled with decreased headcount costs. Selling, general and administrative (SG&A) expenses for the second quarter of 2015 were $4.0 million, compared to $4.9 million in the second quarter of last year. SG&A expenses were $9.5 million for the six months ended June 30, 2015, compared to $8.8 million for the same period in 2014 and included $765,000 and $1.4 million, respectively, in termination-related costs associated with reductions in force implemented in the impacted periods. The net increase in year-to-date SG&A expenses was due primarily to net increases in commercial headcount costs related to the addition of our internal sales force offset by decreased costs related to contracted medical science liaisons. Total operating expenses were $6.3 million for the second quarter of 2015, compared to $10.0 million in the second quarter of last year. Operating expenses were $15.8 million for the six months ended June 30, 2015, compared to $19.2 million for the same period in 2014.

Navidea’s net loss from operations for the quarter ended June 30, 2015 was $3.8 million compared to $9.2 million for the same period in 2014. For the six months ended June 30, 2015, Navidea’s net loss from operations was $11.6 million compared to a net loss from operations of $17.8 million for the same period in 2014. Navidea’s net loss attributable to common stockholders for the quarter ended June 30, 2015 was $9.7 million, or $0.06 per share, compared to $10.2 million, or $0.07 per share, for the same period in 2014. For the six months ended June 30, 2015, Navidea’s net loss attributable to common stockholders was $17.0 million, or $0.11 per share, compared to a net loss attributable to common stockholders of $22.0 million, or $0.15 per share, for the same period in 2014. Net losses attributable to common stockholders include the cash interest expense on our outstanding debt, as well as significant non-cash charges. For the six month periods ended June 30, 2015 and June 30, 2014, net loss attributable to common stockholders included $3.4 million and $2.7 million, respectively, in non-cash interest, losses on extinguishment of debt, and changes in the fair value of financial instruments.

Navidea ended the quarter with $15.8 million in cash. The Company reiterates its 2015 Lymphoseek product revenue estimate of $10 million to $12 million. The Company also expects, following completion of the partnering activities for NAV4694, that cash operating expenses on a quarterly basis will decrease to the point necessary for the Company to achieve its goals of cash flow breakeven from operations. This guidance excludes therapeutic-related research and development costs for the Manocept platform which are expected to be funded separately by Macrophage Therapeutics, Inc.

"With each passing quarter, we continue to take steps towards achieving our goal of cash flow breakeven," said Brent Larson, Navidea’s EVP and CFO. "We began this second quarter with a solid refinancing, positioning our balance sheet to support a pivotal second half of the year in which we expect to realize the impact of our new sales force on Lymphoseek’s revenue growth. This growth, coupled with continued emphasis on controlling our spending, should put us in a strong position to achieve our goals."

Commercialization

The new commercialization plan aligns our sales force to target the oncology treatment team focusing on the surgical oncologist. Initial commercial efforts are being concentrated in breast cancer, melanoma, and oral cavity head and neck cancers, where sentinel lymph node biopsies are already standard of care. The Lymphoseek clinical value proposition and its highly differentiated label provide compelling benefits to the oncology treatment team.

"We achieved our full field force deployment during the middle of the second quarter, positioning us to ramp up Lymphoseek sales according to plan in the second half of 2015," said Thomas Klima, SVP and Chief Commercial Officer. "We are on track with our key performance indicators including brand revenues, monthly procedure growth, brand awareness and message recall measurements. We are ahead of plan in the number of accounts purchasing for the first time and in our account product re-order rate. Based on the anticipated impact of the deployment of our sales force, our positive first half revenues, strong key performance indicators and a planned July 31st price increase, we remain confident in our ability to meet our 2015 sales projections."

Manocept Pipeline

Our future business will be dependent on development of the Manocept CD206 targeting platform for diagnostic and therapeutic applications. Recent Manocept presentations have reported proof-of-concept localization results in humans and early potential seen in Manocept-drug conjugate delivery resulting in apoptosis of tumor cells and associated macrophages in a KS pre-clinical study. At recent medical conferences, the company and its research collaborators reported the following data:

Results were presented in RA at EULAR 2015 European Congress of Rheumatology which highlighted the potential of CD206-targeting Manocept constructs to detect immune-mediated inflammation in RA which could be used diagnostically, to monitor therapeutic efficacy or as a potential therapeutic platform;

Data were presented at the 18th International Workshop on Kaposi’s Sarcoma Herpesvirus and Related Agents demonstrating the imaging and therapeutic potential for our CD206 targeting platform, Manocept, including inducing apoptosis in KS tumor tissue and tumor associated macrophages.

"We continue to build growing evidence supporting the potential of immunotherapeutic applications for Manocept based on these encouraging results," said Frederick O. Cope, Ph.D., SVP and Chief Scientific Officer of Navidea. "Our plans are to continue studies that will validate Lymphoseek’s ability to identify sites of disease and, through our Macrophage Therapeutics subsidiary, evaluate the modulation and/or destruction of macrophages and seek lucrative partnering and collaboration agreements to develop promising therapeutic applications."

On July 30, 2015 Baxalta Incorporated (NYSE:BXLT) reported revenues for the second quarter and first half of 2015, which exceeded expectations, and provided its financial outlook for the third quarter and second half of 2015 (Filing, 8-K, Baxalta, JUL 30, 2015, View Source [SID:1234506759]). The company continues to bolster its portfolio with acquisitions and collaborations focused on rare and orphan diseases, and advanced its product pipeline with the achievement of significant milestones. Baxalta launched as an independent company, listed on the New York Stock Exchange, on July 1, 2015.

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"The Baxalta team is successfully executing on our strategies to build an independent, global biopharmaceutical company focused on delivering innovation that provides patients with better treatment options for challenging chronic and rare diseases," said Ludwig Hantson, chief executive officer and president, Baxalta. "It is an exciting time for Baxalta. Our strong financial performance, increasing depth and breadth across the portfolio, progress toward near-term launches, and compelling growth prospects are differentiating our company."

Results for the Second Quarter of 2015

During the second quarter, Baxalta generated worldwide pro forma sales of $1.47 billion, reflecting growth of 7 percent excluding the impact of foreign currency. Pro forma sales include international sales of $40 million, which were comparable to the prior year, associated with the company’s manufacturing and supply agreement (MSA) for certain biosurgery products for Baxter International. On a GAAP (Generally Accepted Accounting Principles) basis, Baxalta’s worldwide revenues of $1.43 billion declined 2 percent from the prior-year period.

Within the United States, sales of $775 million rose 6 percent, and international sales of $654 million declined 9 percent. On a pro forma basis, international sales of $694 million declined 8 percent. Excluding foreign currency, international pro forma sales increased 9 percent.

Second quarter sales performance was the result of strong momentum and balanced growth across the company’s leading hematology and immunology businesses. Hematology revenues, excluding the impact of foreign currency, grew 6 percent in the second quarter driven by robust global demand for ADVATE [Antihemophilic Factor (Recombinant)], a treatment for hemophilia A, and double-digit growth of FEIBA [Anti-Inhibitor Coagulant Complex], an inhibitor treatment. Newly launched products also contributed to growth, such as RIXUBIS [Coagulation Factor IX (Recombinant)] for the treatment of hemophilia B, and OBIZUR [Antihemophilic Factor (Recombinant), Porcine Sequence], for the treatment of acquired hemophilia A.

Pro forma immunology sales, excluding the impact of foreign currency, advanced 10 percent driven by demand for immunoglobulin therapies and continued launch success of HYQVIA [Immune Globulin Infusion 10% (Human) with Recombinant Human Hyaluronidase]. HYQVIA is the only once-monthly subcutaneous treatment available for adults with primary immunodeficiency, which is achieving rapid acceptance in the United States.

Results for the First Six Months of 2015
Baxalta generated worldwide pro forma sales for the first six months of 2015 of $2.87 billion, reflecting growth of 8 percent excluding the impact of foreign currency. Excluding the impact of foreign currency, hematology revenues grew 5 percent and pro forma immunology sales advanced 11 percent. On a GAAP basis, Baxalta’s worldwide revenues for the first six months of 2015 were $2.79 billion, which does not reflect international pro forma MSA revenues of $82 million for the period, and were comparable to the prior year.

Revenues within the United States of $1.53 billion rose 6 percent, and international sales of $1.26 million declined 6 percent. On a pro forma basis, international sales of $1.34 billion declined 6 percent. Excluding foreign currency, international pro forma sales increased 9 percent versus the first six months of the prior year.
Significant Progress with Cross-Portfolio Pipeline and Commercial Milestones
"Baxalta has a rich pipeline, reflecting meaningful innovation with promising late-stage assets, novel mechanisms, and disruptive technologies," added Hantson. "We continue to achieve a number of significant pipeline and portfolio milestones, which positions the company to drive enhanced growth and value for patients and shareholders."

Recent highlights include:

• Completion of the ONCASPAR (pegaspargase) portfolio acquisition from Sigma-Tau Finanziaria S.p.A., further accelerating Baxalta’s innovation capabilities and commercial presence in growing oncology markets. The acquisition includes ONCASPAR, an important marketed biologic treatment for acute lymphocytic leukemia (ALL), the investigational biologic calaspargase pegol, and an established oncology infrastructure with clinical and sales resources.

• Presentations at the 2015 International Society on Thrombosis and Haemostasis (ISTH) Congress, during which the company:

- Introduced ADYNOVATE as the marketed brand name for BAX 855, an investigational, extended half-life recombinant factor VIII (rFVIII) treatment based on ADVATE. ADYNOVATE is currently under regulatory review by the U.S. Food and Drug Administration (FDA) as well as Japan’s Ministry of Health.

- Announced continued progress on the Phase I/II open-label study on BAX 335, an investigational factor IX gene therapy treatment for hemophilia B.

- Presented additional data from the Phase III clinical trial of BAX 111, which will be marketed in the U.S. as VONVENDI. VONVENDI is currently under regulatory review in the U.S., and if approved, will be the first highly-purified recombinant von Willebrand Factor (rVWF) for patients with von Willebrand disease.

• Receipt of a positive opinion on OBIZUR from the European Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA). OBIZUR is a treatment for bleeding episodes in adult patients with acquired hemophilia A caused by antibodies to factor VIII, a very rare and potentially life-threatening acute bleeding disorder. Marketing authorization from the European Commission is anticipated later this year.

• Submission of a European marketing authorization application (MAA) for approval of the investigational 20% concentration subcutaneous immune globulin (IGSC) treatment for primary immunodeficiencies. As Baxalta expands its immunoglobulin portfolio to address patient needs, the higher potency IG treatment is intended to offer faster infusions with less volume. The company expects to file for U.S. approval later this year.

• Progress in Baxalta’s contract fractionation agreement with Stichting Sanquin Bloedvoorziening (Sanquin Blood Supply Foundation) to enhance supply and support growth in global demand for plasma-based therapies. Sanquin has submitted the production line for approval in Europe, which will provide additional manufacturing flexibility.

• Submission of a European MAA for MM-398 (nal-IRI), for the treatment of metastatic pancreatic cancer for patients who have previously been treated with gemcitabine-based therapy. Baxalta’s U.S. partner Merrimack Pharmaceuticals submitted a new drug application (NDA) for MM-398 to the FDA and it has been granted Priority Review status.

• Presentation of additional data on pacritinib with CTI BioPharma during the 51st Annual Meeting of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper). The presentation included primary and secondary endpoints from PERSIST-1, a randomized, controlled Phase III registration clinical trial of pacritinib, an oral kinase inhibitor with specificity for JAK2 and FLT3 for the treatment of patients with myelofibrosis.

• Formation of Vitesse Biologics, LLC, a unique collaboration model among Baxalta Ventures, Mayo Clinic, and Velocity Pharmaceutical Development to develop antibody and protein-based therapeutics in the areas of hematology, immunology, and oncology. Each organization will provide recognized expertise to enhance target selection and optimization, expression, and product development processes. Baxalta will be involved in the early stages of development and has an exclusive option to acquire the candidates identified by Vitesse following the completion of Phase I trials.

Financial Outlook for Third Quarter and Second Half of 2015

Baxalta today provided its financial outlook for the third quarter and second half of 2015. For the third quarter of 2015, excluding the impact of foreign currency, the company expects pro forma sales growth of 8 to 10 percent. Including the impact of foreign currency, the company expects reported pro forma sales to be comparable to the prior year. Baxalta also expects adjusted earnings, before special items, of $0.48 to $0.50 per diluted share.

For the second half of 2015, Baxalta expects pro forma sales growth, excluding the impact of foreign currency, of 5 to 6 percent. Including the impact of foreign currency, the company expects reported pro forma sales to decline 2 to 3 percent. Also for the second half of the year, Baxalta expects adjusted earnings, before special items, of $1.02 to $1.04 per diluted share.
The company’s guidance for earnings in the third quarter of 2015 excludes approximately $0.01 per diluted share of projected intangible asset amortization expense. The company’s adjusted earnings guidance for the second half excludes $0.02 per diluted share of projected intangible asset amortization expense. Reconciling for the inclusion of these items results in expected GAAP earnings of $0.47 to $0.49 per diluted share for the third quarter of 2015, and earnings of $1.00 to $1.02 per diluted share for the second half of 2015.

On July 30, 2015 Theragenics Corporation, a medical device company serving the cancer treatment and surgical product markets, reported that it has reached an agreement with Advanced Radiation Therapy, LLC to distribute the AccuBoost technology for the treatment of early stage breast cancer (Press release, Theragenics, JUL 30, 2015, View Source [SID:1234506758]). The AccuBoost technology, developed by Advanced Radiation Therapy of Tyngsboro, MA, is used to provide a radiation "boost" following a lumpectomy. A radiation boost to the lumpectomy cavity margin as part of breast conservation therapy is the standard of care to minimize cancer recurrence. AccuBoost is also used as a non-invasive option for accelerated partial breast irradiation (APBI), a form of primary radiation therapy following lumpectomy. Under the agreement Theragenics is the exclusive third-party distributor of AccuBoost in the United States.

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AccuBoost, a real time mammography-guided radiation therapy, has been used to treat over 5,000 women since 2007. The technology’s real-time mammographic imaging provides advantages over other methods of delivering a radiation boost by allowing the physician to visualize the tumor bed and define the appropriate margin to target as the treatment is given. The ability to precisely target the radiation dose minimizes exposure to surrounding tissue and organs such as the heart and lungs. Use of AccuBoost may also result in improved cosmetic outcomes as compared with other methods of delivering a radiation boost1,2.

"This is an exciting step in our history," stated Frank J. Tarallo, Chief Executive Officer of Theragenics Corporation. "For over 30 years we have supported the radiation oncology community with our brachytherapy products for the treatment of men with early stage prostate cancer, and we will continue to do so. AccuBoost allows us to utilize our expertise to provide an excellent brachytherapy treatment option for women with early stage breast cancer. Throughout our history our message to men with prostate cancer has been to know the treatment options. Our message to women facing breast cancer will be identical. Indeed, the mission of our brachytherapy business has been to cure one patient of cancer with each and every order that we ship. AccuBoost underscores our mission of supporting the cure of cancer, and expands on our longtime commitment to the radiation oncology community."

Mr. Tarallo continued, "AccuBoost is a unique technology developed by Advanced Radiation Therapy, an innovative company. Our brachytherapy expertise complements their technical system expertise perfectly. Our established channels in the radiation oncology market segment will make AccuBoost more widely available and expand treatment choices, a plus for breast cancer patients."

Piran Sioshansi, Chief Executive Officer of Advanced Radiation Therapy, remarked, "AccuBoost has a proven track record of effective treatment of breast cancer. Theragenics provides expertise in the sales and marketing of radioactive devices and an extensive brachytherapy distribution channel. Theragenics’ ability to grow AccuBoost utilization and expand access to the technology will be well received by both patients and health care providers."

On July 30, 2015 Threshold Pharmaceuticals, Inc. (NASDAQ: THLD) reported financial results for the second quarter 2015 (Filing, 8-K, Threshold Pharmaceuticals, JUL 30, 2015, View Source [SID:1234506757]). Revenue for the second quarter ended June 30, 2015 was $3.7 million. The operating loss for the second quarter ended June 30, 2015 was $8.9 million. The net loss for the second quarter ended June 30, 2015 was $8.3 million, which included the operating loss of $8.9 million and non-cash income of $0.6 million related to the changes in fair value of the Company’s outstanding warrants and was classified as other income (expense). As of June 30, 2015, Threshold had $67.0 million in cash, cash equivalents and marketable securities, with no debt outstanding.

"We are pleased with progress being made in the development programs for both of our product candidates, evofosfamide and tarloxotinib," said Barry Selick, Ph.D., Chief Executive Officer of Threshold. "We expect to announce top-line results from the two pivotal Phase 3 clinical trials of evofosfamide in patients with advanced soft tissue sarcoma and in patients with advanced pancreatic cancer (MAESTRO) around the end of this year. We are initiating two proof-of-concept Phase 2 clinical trials of tarloxotinib this year in patients whom we believe may benefit from treatment with our proprietary and novel hypoxia-activated EGFR tyrosine kinase inhibitor."

Second Quarter 2015 Financial and Operational Results

Revenue of $3.7 million was recognized for both the second quarter of 2015 and 2014. Revenue is related to the amortization of the aggregate of $110 million in upfront and milestone payments earned in 2013 and 2012 from Threshold’s collaboration with Merck KGaA, Darmstadt, Germany. The revenue from the upfront and milestone payments earned under the agreement is being amortized over the relevant performance period, rather than being immediately recognized when the upfront and milestone payments are earned or received.

The net loss for the second quarter of 2015 was $8.3 million compared to a net loss of $0.8 million for the second quarter of 2014. Included in the net loss for the second quarter of 2015 was an operating loss of $8.9 million and non-cash income of $0.6 million compared to an operating loss of $7.5 million and non-cash income of $6.7 million included in the net loss for the second quarter of 2014. The non-cash income is related to the change in fair value of the Company’s outstanding warrants and was classified as other income (expense).

Research and development expenses were $10.1 million for the second quarter of 2015 compared to $8.7 million for the second quarter of 2014. The increase in research and development expenses was due primarily to a $1.2 million increase in clinical development expenses, net of reimbursement from Merck KGaA, Darmstadt, Germany related to their 70% share of total development expenses for evofosfamide (previously known as TH-302).

General and administrative expenses were $2.5 million for both the second quarter of 2015 and 2014.

Non-cash stock-based compensation expense included in total operating expenses was $1.9 million for the second quarter of 2015 versus $1.5 million for the second quarter of 2014. The increase in stock-based compensation expense was due to the amortization of a greater number of options with higher fair values.

As of June 30, 2015 and March 31, 2015, Threshold had $67.0 million and $83.1 million in cash, cash equivalents and marketable securities, respectively. The net decrease of $16.1 million in cash, cash equivalents and marketable securities during the second quarter of 2015 was primarily due to the Company’s operating cash requirements for the second quarter of 2015.

Second Quarter and Recent Key Achievements

Evofosfamide

In May, Threshold announced that the U.S. Food and Drug Administration (FDA) granted Fast Track designation to the Company’s partner Merck KGaA, Darmstadt, Germany, for the development of evofosfamide (TH-302), administered in combination with gemcitabine, for the treatment of previously untreated patients with locally advanced unresectable or metastatic pancreatic cancer. This is the second Fast Track designation for evofosfamide, the first having been granted to Threshold in November 2014 for the development of evofosfamide in combination with doxorubicin for the treatment of patients with locally advanced or metastatic soft tissue sarcoma.

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Also in May, Threshold presented data from the Phase 2 component of an ongoing Phase 1/2 trial of evofosfamide in combination with the proteasome inhibitor Velcade (bortezomib) and low-dose dexamethasone ("EBorD") in patients with relapsed or refractory multiple myeloma at the annual meeting of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) (Abstract 8579). A clinical benefit rate of 29% (one complete response, two partial responses, and one minimal response) was observed in 4 of 14 patients treated at the recommended Phase 2 dose of evofosfamide (340 mg/m2) in EBorD. These patients had already received multiple types of treatment prior to enrollment including a median of 3 prior bortezomib-containing regimens. The most common adverse events were thrombocytopenia and anemia and no patients discontinued treatment due to an adverse event.

In April, preclinical data evaluating the potential use of evofosfamide in a variety of tumor types were presented by Threshold and Merck KGaA, Darmstadt, Germany, at the annual meeting of the American Association for Cancer Research (AACR) (Free AACR Whitepaper) (Abstract Nos. 2424, 2603, 3867, 5271, and 5333).

Tarloxotinib bromide* ("tarloxotinib")

In April, data on tarloxotinib (TH-4000; previously referred to as PR610 or Hypoxin), Threshold’s proprietary, hypoxia-activated irreversible epidermal growth factor receptor (EGFR) tyrosine kinase inhibitor, were presented in collaboration with the molecule’s co-inventors from The University of Auckland at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) annual meeting (Abstract 5358). The Company believes the data presented support its planned Phase 2 proof-of-concept clinical trials of tarloxotinib in patients with EGFR-positive, T790M-negative NSCLC after conventional EGFR-TKI therapy has failed as well as in patients with recurrent or metastatic squamous cell carcinoma of the head and neck or skin.

Clinical Development Outlook for Threshold- and Merck KGaA, Darmstadt, Germany-Sponsored Trials of Evofosfamide

The development plan for evofosfamide is designed to investigate its safety and efficacy across a broad range of solid tumors and hematologic malignancies. Evofosfamide is being developed in therapeutic areas supported by preclinical and clinical data and where there is high unmet need for new anti-cancer agents. To date, evofosfamide has been evaluated in more than 1,500 patients with cancer. Threshold anticipates the following development activities related to Threshold- and Merck KGaA, Darmstadt, Germany-sponsored clinical trials for evofosfamide in 2015:

· Continue to efficiently execute the two Phase 3 clinical trials of evofosfamide to allow for timely data analyses and to prepare for the potential submission of marketing applications, assuming the data from the trials are supportive;
· Continue enrollment in the Phase 2 clinical trial of evofosfamide designed to support registration for the treatment of patients with non-squamous non-small cell lung cancer;
· Complete enrollment in the Phase 2 clinical trial of evofosfamide in combination with bortezomib (Velcade) and low-dose dexamethasone in patients with relapsed or refractory multiple myeloma; and
· Threshold is in the process of closing the Phase 2 clinical trial of evofosfamide in patients with melanoma due to a slower than anticipated enrollment rate in light of the evolving treatment landscape and new therapeutic options for patients with melanoma since the trial began.

About Evofosfamide

Evofosfamide is an investigational hypoxia-activated prodrug that is designed to be preferentially activated under severe tumor hypoxic conditions, a feature of many solid tumors. Areas of low oxygen levels (hypoxia) in solid tumors are due to insufficient blood vessel supply. Similarly, the bone marrow of patients with hematological malignancies has also been shown, in some cases, to be severely hypoxic.

Evofosfamide is currently in two Phase 3 trials, both of which are fully recruited: one in combination with doxorubicin versus doxorubicin alone in patients with locally advanced unresectable or metastatic soft tissue sarcoma (STS) (the TH-CR-406 trial), and the other in combination with gemcitabine versus gemcitabine and placebo in patients with locally advanced unresectable or metastatic pancreatic cancer (the MAESTRO trial). Both Phase 3 trials are being conducted under Special Protocol Assessment (SPA) agreements with the FDA. The FDA and the European Commission have granted evofosfamide Orphan Drug designation for the treatment of STS and pancreatic cancer. The FDA has also granted Fast Track designation for evofosfamide for both STS and pancreatic cancer. Evofosfamide is also being investigated in a Phase 2 trial designed to support registration for the treatment of non-squamous non-small cell lung cancer, and in earlier-stage clinical trials of other solid tumors and hematological malignancies.

Threshold has a global license and co-development agreement for evofosfamide with Merck KGaA, Darmstadt, Germany, which includes an option for Threshold to co-commercialize in the U.S.

About Tarloxotinib Bromide

Tarloxotinib bromide, or "tarloxotinib", (TH-4000) is a hypoxia-activated, covalent (irreversible) epidermal growth factor receptor tyrosine kinase inhibitor (EGFR-TKI) that targets the activating mutations of EGFR (L858R and Del19) and wild-type, or "normal", EGFR. Tarloxotinib is designed as a prodrug to selectively release its EGFR-TKI upon encountering severe tumor hypoxic conditions, a feature of many solid tumors. Accordingly, it has the potential to effectively shut down aberrant wild-type and mutant EGFR signaling in a tumor-selective manner, thus potentially avoiding or reducing the toxic side effects associated with currently available EGFR-TKIs and systemic wild-type EGFR inhibition. Threshold expects to initiate two Phase 2 proof-of-concept trials with tarloxotinib in 2015: one in patients with mutant EGFR-positive, T790M-negative advanced non-small cell lung cancer progressing on an EGFR-TKI, and the other in patients with recurrent or metastatic squamous cell carcinoma of the head and neck or skin. Threshold licensed exclusive worldwide rights to tarloxotinib from the University of Auckland in September 2014.

On July 30, 2015 Sunesis Pharmaceuticals, Inc. (Nasdaq:SNSS) reported financial results for the second quarter ended June 30, 2015. Loss from operations for the three and six months ended June 30, 2015 was $10.6 million and $19.4 million, respectively (Press release, Sunesis, JUL 30, 2015, View Source;p=RssLanding&cat=news&id=2072752 [SID:1234506755]). As of June 30, 2015, cash, cash equivalents and marketable securities totaled $39.6 million.

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"We remain committed to moving vosaroxin forward as an important new therapy for patients with AML, and to realizing the value of this product candidate for all our constituents," said Daniel Swisher, Chief Executive Officer of Sunesis. "As part of this effort, we are moving forward rapidly toward the filing of a marketing authorization application in Europe and are carefully evaluating and refining our plans to gain marketing approval in the U.S. As we continue to advance these strategies and work toward key milestones with our kinase inhibitor pipeline, we are also evaluating and prioritizing our spending to ensure our ability to realize the value of our portfolio."

Second Quarter 2015 Highlights

Received European regulatory guidance regarding potential marketing authorization application for Vosaroxin in AML. In July 2015, Sunesis announced that, following pre-submission advisory meetings to discuss the potential submission of a Marketing Authorization Application (MAA) for vosaroxin in Europe, the company is proceeding with an MAA filing. The MAA will focus on the indication of relapsed/refractory acute myeloid leukemia (AML) in patients age 60 years and older, a population with the greatest medical need and for whom the greatest benefit was observed in the vosaroxin/cytarabine treatment arm of VALOR, the company’s pivotal Phase 3 study of vosaroxin in adult patients with relapsed or refractory AML.

Received feedback from FDA regarding NDA filing for Vosaroxin in AML. In July 2015, Sunesis announced that, following a recent meeting with the U.S. Food and Drug Administration (FDA), the FDA recommended that the company provide additional clinical evidence to support a future NDA submission. The company is currently evaluating and refining its plan to gain marketing approval in the U.S. based on this feedback.

Announced presentation of new data at EHA (Free EHA Whitepaper) 2015 from predefined subgroup of patients age 60 years and older enrolled in VALOR. In June 2015, Sunesis announced the presentation of results from predefined subgroups of patients age 60 years and older enrolled in VALOR. The results were presented at the 20th Congress of the European Society of Hematology in Vienna, Austria. The poster, titled "Improved survival in patients ≥60 with first relapsed/refractory acute myeloid leukemia treated with vosaroxin plus cytarabine vs placebo plus cytarabine: results from the Phase 3 VALOR study," as well as an additional poster presented at the meeting, titled "Allogeneic transplant in patients ≥60 years of age with first relapsed or refractory acute myeloid leukemia after treatment with vosaroxin or placebo plus cytarabine: results from VALOR," are available on the Sunesis website as www.sunesis.com.

Announced presentation of VALOR trial subgroup analysis at ASCO (Free ASCO Whitepaper) 2015. In May 2015, Sunesis announced the presentation of results from a post hoc subgroup analysis of patients age 60 years and older who underwent allogeneic hematopoietic cell transplant (HCT) in the VALOR trial. The poster, titled "Allogeneic hematopoietic cell transplant (HCT) in patients (pts) ≥ 60 years of age with first relapsed or refractory acute myeloid leukemia (R/R AML) after treatment with vosaroxin plus cytarabine (pla/cyt): results from VALOR", is available on the Sunesis website at www.sunesis.com.

Financial Highlights

Cash, cash equivalents and marketable securities totaled $39.6 million as of June 30, 2015, as compared to $43.0 million as of December 31, 2014. The decrease of $3.4 million was primarily due to $19.8 million of net cash used in operating activities and $1.6 million of principal payments against notes payable, partially offset by $18.0 million raised from the sale of common stock through the company’s at-the-market facility with Cantor Fitzgerald & Co. and from option exercises. A further $0.4 million was raised in July through this facility, resulting in a pro-forma June 30, 2015 cash balance of $40.0 million. This capital is expected to be sufficient to fund the company to the middle of 2016.

Revenue for the three and six months ended June 30, 2015 was $0.9 million and $1.7 million as compared to $2.0 million and $4.0 million for the same periods in 2014. Revenue in each period was primarily due to deferred revenue recognized related to the royalty agreement with Royalty Pharma.

Research and development expense was $6.3 million and $10.8 million for the three and six months ended June 30, 2015 as compared to $7.2 million and $14.8 million for the same periods in 2014. The decreases between the comparable three and six month periods were primarily due to reductions in clinical trial expenses in each case.

General and administrative expense was $5.2 million and $10.3 million for the three and six months ended June 30, 2015 as compared to $6.4 million and $9.8 million for the same periods in 2014. The decrease between the comparable three month periods was primarily due to decreases in personnel costs and outside services costs. The increase between the comparable six month periods was primarily due to an increase in outside services costs.

Interest expense was $0.2 million and $0.5 million for the three and six months ended June 30, 2015 as compared to $0.5 million and $1.0 million for the same periods in 2014. The decreases in the 2015 periods were due to the reduced principal balance outstanding on notes payable.

Net other income was $1.9 million and $1.8 million for the three and six months ended June 30, 2015 as compared to $0.3 million of net other income and $4.8 million of net other expense for the same periods in 2014. The amounts for each period were primarily comprised of non-cash credits or charges for the revaluation of warrants issued in 2010.

Cash used in operations was $19.8 million for the six months ended June 30, 2015 as compared to $21.6 million for the same period in 2014. Net cash used in the 2015 period resulted primarily from the net loss of $18.1 million and changes in operating assets and liabilities of $3.4 million, partially offset by net adjustments for non-cash items of $1.7 million.

Sunesis reported loss from operations of $10.6 million and $19.4 million for the three and six months ended June 30, 2015 as compared to $11.6 million and $20.6 million for the same periods in 2014. Net loss was $8.9 million and $18.1 million for the three and six months ended June 30, 2015 as compared to $11.8 million and $26.4 million for the same periods in 2014.
About QINPREZO (vosaroxin)
QINPREZO (vosaroxin) is an anti-cancer quinolone derivative (AQD), a class of compounds that has not been used previously for the treatment of cancer. Preclinical data demonstrate that vosaroxin both intercalates DNA and inhibits topoisomerase II, resulting in replication-dependent, site-selective DNA damage, G2 arrest and apoptosis. Both the U.S. Food and Drug Administration (FDA) and European Commission have granted orphan drug designation to vosaroxin for the treatment of AML. Additionally, vosaroxin has been granted fast track designation by the FDA for the potential treatment of relapsed or refractory AML in combination with cytarabine. Vosaroxin is an investigational drug that has not been approved for use in any jurisdiction.
The trademark name QINPREZO is conditionally accepted by the FDA and the EMA as the proprietary name for the vosaroxin drug product candidate.