On May 5, 2016 Medivation, Inc. (NASDAQ: MDVN) reported its financial results for the quarter ended March 31, 2016 and reaffirmed full-year 2016 financial guidance (Press release, Medivation, MAY 5, 2016, View Source [SID:1234511985]).

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U.S. net sales of XTANDI (enzalutamide) capsules, as recorded by Astellas, were $307.6 million for the quarter (+37% vs. prior year). As anticipated, first quarter U.S. net sales reflected a higher gross-to-net (GTN) rate and a decrease in channel partner inventory compared to the fourth quarter of 2015 due to seasonal factors. U.S. XTANDI unit demand grew approximately 7% over the fourth quarter of 2015 and 33% over the prior year first quarter. Ex-U.S. net sales of XTANDI, as recorded by Astellas, were approximately $240 million for the quarter (+80% vs. prior year).

"Medivation is off to a strong start in 2016 as we continue to expand our leadership position in oncology, extend XTANDI’s reach into urology and other areas, and advance our robust late-stage pipeline," said David Hung, M.D., Founder, President and Chief Executive Officer of Medivation. "The first quarter of 2016 represented a landmark quarter for Medivation as for the first time we claimed more than 50% market share of the novel hormonal therapy prostate cancer market in the U.S."

"As we look ahead, we believe there are a number of positive trends and milestones that will allow us to accelerate our momentum and create additional shareholder value," added Dr. Hung. "For example, as XTANDI is increasingly used as first-line therapy in metastatic castration resistant prostate cancer, we expect the duration of treatment to continue to increase beyond the nearly eight months that we saw at the end of 2015. Furthermore, with the Committee for Medicinal Products opinion to include TERRAIN data in the European XTANDI label and the upcoming U.S. PDUFA date on October 22, 2016, we believe that we are poised to achieve even greater penetration of the urology market where the largest commercial opportunity lies for XTANDI. In addition to our plans to grow XTANDI, our wholly-owned assets, talazoparib and pidilizumab, represent compelling pipeline opportunities that we plan to develop and commercialize to drive long-term value appreciation for our shareholders."

Key Highlights Include:

Received positive opinion from the Committee for Medicinal Products for Human Use of the European Medicines Agency recommending inclusion of data from the head-to-head TERRAIN trial of enzalutamide versus bicalutamide in the European label for XTANDI.
Received confirmation that the supplemental New Drug Application for XTANDI in metastatic castration-resistant prostate cancer (CRPC) was accepted for review by the U.S. Food and Drug Administration, which includes findings from the Phase 2 TERRAIN and STRIVE studies.
Enrolled the first patient in the ARCHES Phase III registrational trial to evaluate the efficacy and safety of enzalutamide with androgen deprivation therapy (ADT) versus placebo with ADT in metastatic hormone sensitive prostate cancer patients.
Announced data from an investigator sponsored Phase I study evaluating talazoparib (MDV3800) in combination with low-dose chemotherapy in patients with advanced malignancies and a Phase II study evaluating potential immune-activation properties of enzalutamide in patients with non-metastatic hormone sensitive prostate cancer at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting.
Completed expansion and bifurcation of our sales force from 90 to 129 representatives.
Named Jennifer Jarrett to the role of Chief Financial Officer following the announced retirement of Rick Bierly.
Non-GAAP Financial Results:

Medivation’s non-GAAP collaboration revenue for the first quarter of 2016 was $182.5 million, compared with $127.8 million for the same period in 2015 (+43% vs. prior year).

Medivation’s non-GAAP collaboration revenue consists of two components: a) collaboration revenue related to U.S. XTANDI net sales and b) collaboration revenue related to ex-U.S. XTANDI net sales.

a) Medivation’s collaboration revenue related to U.S. net sales of XTANDI for the first quarter 2016 was $153.8 million, compared with $112.0 million for the same period in 2015 (+37% vs. prior year).

b) Medivation’s collaboration revenue related to ex-U.S. net sales of XTANDI for the first quarter 2016 was $28.7 million, compared with $15.8 million for the same period in 2015 (+82% vs. prior year). Under the Astellas collaboration, the tiered royalty rate is reset at the beginning of each calendar year, resulting in the lowest royalty rate in the first quarter, and can increase up to the low-twenties as a percentage of ex-U.S. net sales.

Non-GAAP research and development (R&D) expenses for the first quarter of 2016 were $68.4 million, compared with $37.9 million for the same period in 2015. The increase in non-GAAP R&D expenses primarily relates to direct expenses associated with our talazoparib program, which Medivation acquired in the fourth quarter of 2015. The sequential quarter-over-quarter growth in R&D expenses was modest at 11%, and this sequential growth rate should decline in the subsequent quarters.

Non-GAAP selling, general and administrative (SG&A) expenses for the first quarter of 2016 were $83.8 million, compared with $67.4 million for the same period in 2015. The increase in non-GAAP SG&A expenses primarily relates to higher personnel-related costs, higher sales, marketing and medical affairs costs, and higher royalties. In addition, consistent with prior years, first quarter SG&A expenses are disproportionately high due to certain annually recurring collaboration expenses incurred by Astellas that are expensed to Medivation in the first quarter of the year. As such, Medivation expects that its non-GAAP SG&A expenses will be lower in subsequent quarters, similar to the trend it observed in 2015.

Non-GAAP net income for the first quarter of 2016 was $18.8 million, or $0.11 per diluted share, compared with non-GAAP net income of $13.4 million, or $0.08 per diluted share, for the same period in 2015 (+35% vs. prior year on a per share basis). Consistent with the first quarter of 2015, our first quarter 2016 non-GAAP net income was impacted by several seasonal items including the lower royalty rate on ex-U.S. XTANDI sales, the higher GTN accrual by Astellas on U.S. net sales, inventory drawdowns and the previously mentioned SG&A expenses related to our Astellas collaboration.

GAAP Financial Results:

On a GAAP basis, Medivation’s collaboration revenue for the first quarter of 2016 was $182.5 million, compared with $129.2 million for the same period in 2015 (+41% vs. prior year). Medivation’s GAAP basis collaboration revenue includes upfront and milestone payments for the first quarter 2015 (not included in non-GAAP collaboration revenue), which totaled $1.4 million.

R&D expenses for the first quarter of 2016 were $77.6 million on a GAAP basis, compared with $44.7 million for the same period in 2015. SG&A expenses for the first quarter of 2016 were $96.8 million on a GAAP basis, compared with $83.9 million for the same period in 2015.

Medivation reported GAAP basis net income of $4.8 million, or $0.03 per diluted share, for the quarter ended March 31, 2016, compared with GAAP basis net loss of $3.1 million, or $0.02 per diluted share, for the same period in 2015.

At March 31, 2016, cash and cash equivalents were $317.4 million, compared with $225.9 million at December 31, 2015. The $91.5 million increase was primarily due to the receipt during the quarter of a $175.0 million sales milestone from Astellas offset by the repayment of $75.0 million borrowings under Medivation’s Revolving Credit Facility.

2016 Financial Guidance:

Medivation is reaffirming its 2016 full-year financial guidance as follows:

MEDIVATION FULL-YEAR 2016 FINANCIAL GUIDANCE

Year Ending December 31, 2016
U.S. net sales of XTANDI $1.425 to $1.525 billion(1)
Non-GAAP collaboration revenue $900 to $970 million(2)
Non-GAAP operating expenses $555 to $600 million(3)
Non-GAAP R&D expenses $280 to $300 million(4)
Non-GAAP SG&A expenses $275 to $300 million(5)
Non-GAAP tax rate 35.5% – 36%
Non-GAAP diluted earnings per share $1.30 – $1.40

(1) U.S. net sales of XTANDI, as reported by Astellas, are expected to range between $1.425 and $1.525 billion in 2016. This represents Medivation’s projection of U.S. net sales at the Astellas level.
(2) Non-GAAP collaboration revenue is expected to range between $900 and $970 million. This measure includes (i) Medivation’s collaboration revenue related to U.S. net sales of XTANDI and (ii) Medivation’s collaboration revenue related to ex-U.S. net sales of XTANDI, in the form of a royalty payment earned from Astellas.
(3) Non-GAAP operating expenses, net of cost-sharing payments to/from Astellas, are expected to range between $555 and $600 million. Non-GAAP operating expenses exclude non-cash, stock-based compensation expense, and any change in fair value of contingent purchase consideration and in-process R&D.
(4) Non-GAAP R&D expenses exclude an estimated $30 – $35 million of stock-based compensation expense and any change in fair value of contingent purchase consideration and in-process R&D.
(5) Non-GAAP SG&A expenses exclude an estimated $38 – $42 million of stock-based compensation expense and any change in fair value of contingent purchase consideration.



MEDIVATION, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)

March 31,
2016 December 31,
2015
ASSETS
Current assets:
Cash and cash equivalents $ 317,361 $ 225,853
Receivable from collaboration partner 186,593 391,558
Prepaid expenses and other current assets 24,416 15,877
Restricted cash 1,140 930
Total current assets 529,510 634,218
Property and equipment, net 59,849 58,142
Intangible assets 644,299 644,299
Deferred income tax assets 53,148 57,011
Restricted cash, net of current 11,996 12,206
Goodwill 18,643 18,643
Other non-current assets 8,037 7,072
Total assets $ 1,325,482 $ 1,431,591
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, accrued expenses and other current liabilities $ 121,995 $ 186,203
Borrowings under Revolving Credit Facility - 75,000
Contingent consideration 4,924 4,900
Current portion of build-to-suit lease obligation 110 -
Total current liabilities 127,029 266,103
Contingent consideration 268,303 262,368
Build-to-suit lease obligation, excluding current portion 17,278 17,406
Other non-current liabilities 12,658 13,035
Total liabilities 425,268 558,912
Stockholders’ equity:
Preferred stock, $0.01 par value per share; 1,000,000 shares authorized; no shares issued and outstanding - -
Common stock, $0.01 par value per share; 340,000,000 shares authorized; 164,581,922 and 163,905,342 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively 1,646 1,639
Additional paid-in capital 707,870 684,841
Accumulated other comprehensive loss (317 ) -
Retained earnings 191,015 186,199
Total stockholders’ equity 900,214 872,679
Total liabilities and stockholders’ equity $ 1,325,482 $ 1,431,591



MEDIVATION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended
March 31,
2016 2015
Collaboration revenue $ 182,497 $ 129,188
Operating expenses:
Research and development expenses 77,587 44,676
Selling, general and administrative expenses 96,827 83,939
Total operating expenses 174,414 128,615
Income from operations 8,083 573
Other income (expense), net:
Interest expense (680 ) (5,608 )
Other, net (209 ) 137
Total other income (expense), net (889 ) (5,471 )
Income (loss) before income tax (expense) benefit 7,194 (4,898 )
Income tax (expense) benefit (2,378 ) 1,780
Net income (loss) $ 4,816 $ (3,118 )
Basic net income (loss) per common share $ 0.03 $ (0.02 )
Diluted net income (loss) per common share $ 0.03 $ (0.02 )
Weighted average common shares used in the calculation of basic net income (loss) per common share 164,247 156,637
Weighted average common shares used in the calculation of diluted net income (loss) per common share 168,397 156,637



MEDIVATION, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(in thousands, except per share amounts)
(unaudited)

Three Months Ended
March 31,
2016 March 31,
2015
Collaboration revenue reconciliation:
GAAP collaboration revenue $ 182,497 $ 129,188
Upfront and milestone-related payments from Astellas(a) - (1,411 )
Non-GAAP collaboration revenue $ 182,497 $ 127,777
Research and development expenses reconciliation:
GAAP research and development expenses $ 77,587 $ 44,676
Stock-based compensation expense(b) (6,037 ) (5,811 )
Contingent consideration(c) (1,140 ) (1,000 )
Upfront license and milestone-related payments to third party(d) (2,000 ) -
Non-GAAP research and development expenses $ 68,410 $ 37,865
Selling, general and administrative expenses reconciliation:
GAAP selling, general and administrative expenses $ 96,827 $ 83,939
Stock-based compensation expense(b) (8,174 ) (7,561 )
Contingent consideration(c) (4,819 ) (3,000 )
Upfront license and milestone related payments to third party(d) - (5,949 )
Non-GAAP selling, general and administrative expenses $ 83,834 $ 67,429
Other expense (income), net reconciliation:
GAAP other expense (income), net $ 889 $ 5,471
Non-cash interest expense(e) (85 ) (3,910 )
Loss on extinguishment of convertible notes(f) - (3 )
Non-GAAP other expense (income), net $ 804 $ 1,558
Income tax expense reconciliation:
GAAP income tax expense (benefit) $ 2,378 $ (1,780 )
Income tax effect on non-GAAP adjustments(g) 8,253 9,295
Non-GAAP income tax expense $ 10,631 $ 7,515
Net income (loss) reconciliation:
GAAP net income (loss) $ 4,816 $ (3,118 )
Upfront and milestone-related payments from Astellas(a) - (1,411 )
Stock-based compensation expense(b) 14,211 13,372
Contingent consideration(c) 5,959 4,000
Upfront license and milestone-related payments to third party(d) 2,000 5,949
Non-cash interest expense(e) 85 3,910
Loss on extinguishment of convertible notes(f) - 3
Income tax adjustments(g) (8,253 ) (9,295 )
Non-GAAP net income $ 18,818 $ 13,410
Diluted net income per share reconciliation:
GAAP diluted net income (loss) $ 4,816 $ (3,118 )
Non-GAAP adjustments after-tax 14,002 16,528
Non-GAAP diluted net income $ 18,818 $ 13,410
Non-GAAP diluted net income per share $ 0.11 $ 0.08
Shares used in per share calculation (diluted):
GAAP shares used in per share calculation (diluted)(h) 168,397 156,637
Dilutive impact of common stock equivalents(h) - 5,461
Non-GAAP shares used in per share calculation (diluted)(h) 168,397 162,098
Non-GAAP adjustment summary:
Collaboration revenue $ - $ (1,411 )
Research and development expenses 9,177 6,811
Selling, general and administrative expenses 12,993 16,510
Other expense (income), net 85 3,913
Total non-GAAP adjustments before tax 22,255 25,823
Income tax effect (8,253 ) (9,295 )
Total non-GAAP adjustments after tax $ 14,002 $ 16,528

(a) Upfront and milestone payments from Astellas: Upfront and milestone payments are excluded from non-GAAP financial measures because they occur at irregular intervals and are not related to Medivation’s long term core business going forward; such exclusion facilitates understanding of the ongoing economics of the business, facilitates period over period comparison and is reflective of how Medivation manages its business.
(b) Stock-based compensation expense: Stock-based compensation expense is excluded from non-GAAP financial measures because of the nature of this charge, varying available valuation methodologies, subjective assumptions and the variety of award types; such exclusion facilitates comparison of Medivation’s operating results to peer companies.
(c) Contingent consideration: The effects of contingent consideration valuation are excluded from non-GAAP financial measures because of the nature of this item, which is related to the change in fair value of the liability for contingent consideration related to the acquisition of worldwide rights to talazoparib from BioMarin Pharmaceutical Inc., and Medivation’s license agreement with CureTech, Inc. for pidilizumab; such exclusion facilitates comparisons of Medivation’s operating results to peer companies.
(d) Upfront license and milestone-related payments to third party and other adjustments: These payments and adjustments are excluded from non-GAAP financial measures because they occur at irregular intervals and are not related to Medivation’s long term core business going forward; such exclusion facilitates understanding of the ongoing economics of the business, facilitates period over period comparison and is reflective of how Medivation manages its business.
(e) Non-cash interest expense related to the Revolving Credit Facility and the Convertible Notes: The effects of non-cash interest expense related to the Revolving Credit Facility and the Convertible Notes are excluded from non-GAAP financial measures because these expenses are non-cash expenses; such exclusion facilitates comparison of Medivation’s cash operating results to peer companies and is reflective of how Medivation manages its business.
(f) Loss on extinguishment of Convertible Notes: The effects of loss on extinguishment of Convertible Notes are excluded from non-GAAP financial measures because this expense is a non-cash charge; such exclusion facilitates comparison of Medivation’s cash operating results to peer companies and is reflective of how Medivation manages its business.
(g) Income tax adjustments: Adjustments to income tax expense for non-GAAP financial measures consist of the income tax effect of the non-GAAP adjustments.
(h) Shares used in per share calculation (diluted): In periods in which Medivation reports a GAAP net loss, all common stock equivalents are deemed anti-dilutive and basic and diluted weighted average shares are equal. Because Medivation had non-GAAP net income for the three months ended March 31, 2015, the dilutive effect of common stock equivalents is included in the non-GAAP diluted net income per share calculation for that period.

Non-GAAP Financial Measures
To supplement Medivation’s financial results presented on a U.S. GAAP basis, Medivation uses certain non-GAAP financial measures as shown in the tables above. Medivation believes that these non-GAAP financial measures are helpful in understanding Medivation’s past financial performance and potential future financial results. These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable U.S. GAAP financial measures, and they should be read in conjunction with Medivation’s consolidated financial statements prepared in accordance with U.S. GAAP. Medivation’s management uses these non-GAAP financial measures for planning, budgeting, forecasting and performance measurement, to assess historical operating performance and make financial and operational business decisions, and also to provide forecasts and financial guidance to investors on this basis. In addition, Medivation believes that the presentation of these non-GAAP financial measures is useful to investors because it enhances the ability of investors to compare Medivation’s financial results period over period and allows for greater transparency with respect to key financial metrics Medivation uses in making operating decisions, and also because Medivation’s investors and analysts regularly use them to model or track Medivation’s financial performance. Medivation believes that the non-GAAP financial measures provide investors with a meaningful understanding of its historical and potential future financial results because they exclude certain non-cash charges such as stock-based compensation which is substantially dependent on changes in the market price of Medivation’s common stock and the timing of equity awards, impairment charges, changes in fair value of intangible assets and contingent purchase consideration, revenues and expenses that occur at irregular intervals, such as milestone payments earned from collaboration partners and related payments to licensors of technology, non-cash interest expense and losses related to Convertible Notes. Investors should note that these non-GAAP financial measures are not prepared under any comprehensive set of accounting rules or principles and do not reflect all of the amounts associated with Medivation’s results of operations as determined in accordance with U.S. GAAP. Investors should also note that these non-GAAP financial measures have no standardized meaning prescribed by U.S. GAAP and, therefore, have limits in their usefulness to investors. In addition, from time-to-time in the future there may be other items that Medivation may exclude for the purposes of its non-GAAP financial measures; likewise, Medivation may in the future cease to exclude items that Medivation has historically excluded for the purpose of Medivation’s non-GAAP financial measures. Medivation’s non-GAAP financial measures may not be comparable with non-GAAP financial measures provided by other companies.

Conference Call/Webcast Information
To participate by telephone in today’s live call beginning at 4:30 p.m. Eastern Time, please call 877-303-2523 from the U.S. or +1-253-237-1755 internationally. Individuals may access the live audio webcast by visiting View Source A replay of the webcast will be available on Medivation’s website for a limited time following the live event.

About XTANDI
XTANDI (enzalutamide) capsules is an androgen receptor inhibitor that blocks multiple steps in the androgen receptor signaling pathway within the tumor cell. In preclinical studies, enzalutamide has been shown to competitively inhibit androgen binding to androgen receptors, and inhibit androgen receptor nuclear translocation and interaction with DNA. The clinical significance of this MOA is unknown.

XTANDI is approved by the U.S. Food and Drug Administration for the treatment of patients with metastatic castration-resistant prostate cancer (CRPC).

Important Safety Information
Contraindications XTANDI is not indicated for women and is contraindicated in women who are or may become pregnant. XTANDI can cause fetal harm when administered to a pregnant woman.

Warnings and Precautions
Seizure In Study 1, conducted in patients with metastatic castration-resistant prostate cancer (CRPC) who previously received docetaxel, seizure occurred in 0.9% of XTANDI patients and 0% of placebo patients. In Study 2, conducted in patients with chemotherapy-naive metastatic CRPC, seizure occurred in 0.1% of XTANDI patients and 0.1% of placebo patients. There is no clinical trial experience re- administering XTANDI to patients who experienced a seizure, and limited safety data are available in patients with predisposing factors for seizure. Study 1 excluded the use of concomitant medications that may lower threshold; Study 2 permitted the use of these medications. Because of the risk of seizure associated with XTANDI use, patients should be advised of the risk of engaging in any activity during which sudden loss of consciousness could cause serious harm to themselves or others. Permanently discontinue XTANDI in patients who develop a seizure during treatment.

Posterior Reversible Encephalopathy Syndrome (PRES) In post approval use, there have been reports of PRES in patients receiving XTANDI. PRES is a neurological disorder which can present with rapidly evolving symptoms including seizure, headache, lethargy, confusion, blindness, and other visual and neurological disturbances, with or without associated hypertension. A diagnosis of PRES requires confirmation by brain imaging, preferably MRI. Discontinue XTANDI in patients who develop PRES.

Adverse Reactions
The most common adverse reactions (≥ 10%) reported from two combined clinical studies that occurred more commonly (≥ 2% over placebo) in XTANDI patients were asthenia/fatigue, back pain, decreased appetite, constipation, arthralgia, diarrhea, hot flush, upper respiratory tract infection, peripheral edema, dyspnea, musculoskeletal pain, weight decreased, headache, hypertension, and dizziness/vertigo.

In Study 1, Grade 3 and higher adverse reactions were reported among 47% of XTANDI patients and 53% of placebo patients. Discontinuations due to adverse events were reported for 16% of XTANDI patients and 18% of placebo patients. In Study 2, Grade 3-4 adverse reactions were reported in 44% of XTANDI patients and 37% of placebo patients. Discontinuations due to adverse events were reported for 6% of both study groups.

Lab Abnormalities: Grade 1-4 neutropenia occurred in 15% of XTANDI patients (1% Grade 3-4) and 6% of placebo patients (0.5% Grade 3-4). Grade 1-4 thrombocytopenia occurred in 6% of XTANDI patients (0.3% Grade 3-4) and 5% of placebo patients (0.5% Grade 3-4). Grade 1-4 elevations in ALT occurred in 10% of XTANDI patients (0.2% Grade 3-4) and 16% of placebo patients (0.2% Grade 3-4). Grade 1-4 elevations in bilirubin occurred in 3% of XTANDI patients (0.1% Grade 3-4) and 2% of placebo patients (no Grade 3-4).
Infections: In Study 1, 1% of XTANDI patients, compared to 0.3% of placebo patients died from infections or sepsis. In Study 2, 1 patient in each treatment group (0.1%) had an infection resulting in death.
Falls (including fall-related injuries), occurred in 9% of XTANDI patients and 4% of placebo patients. Falls were not associated with loss of consciousness or seizure. Fall-related injuries were more severe in XTANDI patients, and included non-pathologic fractures, joint injuries, and hematomas.
Hypertension occurred in 11% of XTANDI patients and 4% of placebo patients. No patients experienced hypertensive crisis. Medical history of hypertension was balanced between arms. Hypertension led to study discontinuation in < 1% of all patients.
Drug Interactions

Effect of Other Drugs on XTANDI Avoid strong CYP2C8 inhibitors, as they can increase the plasma exposure to XTANDI. If co-administration is necessary, reduce the dose of XTANDI.

Avoid strong CYP3A4 inducers as they can decrease the plasma exposure to XTANDI. If co-administration is necessary, increase the dose of XTANDI.

Effect of XTANDI on Other Drugs Avoid CYP3A4, CYP2C9, and CYP2C19 substrates with a narrow therapeutic index, as XTANDI may decrease the plasma exposures of these drugs. If XTANDI is co-administered with warfarin (CYP2C9 substrate), conduct additional INR monitoring.

For Full Prescribing Information for XTANDI (enzalutamide) capsules, please visit www.XtandiHCP.com/PI

You are encouraged to report negative side effects of prescription drugs to the FDA. Visit www.fda.gov/medwatch or call 1-800-FDA-1088.

On May 5, 2016 Clovis Oncology, Inc. (NASDAQ:CLVS) reported financial results for its quarter ended March 31, 2016, and provided an update on the Company’s clinical development programs and regulatory outlook for the remainder of 2016 (Press release, Clovis Oncology, MAY 5, 2016, View Source;p=RssLanding&cat=news&id=2165717 [SID:1234511978]).

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"We are very disappointed in the outcome for rociletinib, as there is a need for additional options for this difficult to treat disease," said Patrick J. Mahaffy, President and CEO of Clovis Oncology. "Our focus moving forward is clear: prioritize rucaparib development activity and prepare for its potential U.S. launch, and manage our existing cash into 2018."

First Quarter 2016 Financial Results

Clovis had $445.5 million in cash, cash equivalents and available-for-sale securities as of March 31, 2016. Cash used in operating activities was $83.7 million for the first quarter of 2016, compared with $48.4 million in the first quarter of 2015. Clovis had approximately 38.4 million outstanding shares of common stock as of March 31, 2016.

Clovis reported a net loss for the first quarter of 2016 of $83.4 million, or ($2.17) per share, compared to a net loss of $63.1 million, or ($1.86) per share, for the first quarter of 2015. Net loss for the first quarter of 2016 included share-based compensation expense of $11.0 million compared to $8.7 million for the first quarter of 2015.

Research and development expenses totaled $74.6 million for the first quarter of 2016, compared to $56.8 million for the first quarter 2015. The year-over-year increase in expenses is due to the significantly expanded clinical development activities for rucaparib, increased commercial product planning costs and increased personnel-related expenses associated with the hiring of additional staff including the U.S. sales force to support the Company’s expanded activities, partially offset by lower expenses related to clinical development activities for rociletinib.

General and administrative expenses totaled $9.8 million for the first quarter of 2016, compared to $6.8 million for the first quarter 2015. The increase year over year is primarily due to higher legal expense, consulting fees and personnel costs for employees engaged in general and administrative activities.

The Company expects cash used in operating activities for 2016 will total approximately $294 – $309 million, and to end the year with approximately $220 – $235 million in cash, cash equivalents and available-for-sale securities. Clovis anticipates being able to continue to fund operations into 2018 from currently available cash, cash equivalents and available-for-sale securities.

2016 Key Milestones and Objectives

Highlights of planned or completed objectives for each product follow:

Rucaparib

During the second quarter of 2016, Clovis commenced the submission of its rolling New Drug Application (NDA) regulatory filing to the U.S. Food and Drug Administration (FDA) for rucaparib for the monotherapy treatment of patients with advanced ovarian cancer with deleterious BRCA-mutated tumors (inclusive of both germline and somatic BRCA mutations) previously treated with multiple prior therapies. Rucaparib was granted Breakthrough Therapy designation by the FDA in April 2015. Clovis agreed with the FDA that the submission would be a rolling NDA and has filed the first component for potential accelerated approval of rucaparib in the U.S. The rolling NDA allows completed portions of an NDA to be submitted and reviewed by the FDA on an ongoing basis. The Company intends to complete the NDA submission by the end of the second quarter of 2016.

Foundation Medicine, Clovis’ companion diagnostic partner, intends to file a Premarket approval application (PMA) of its diagnostic assay designed to identify both germline and somatic BRCA mutations with the FDA. The timing of the submission is expected to allow for regulatory approval of the companion diagnostic at substantially the same time that rucaparib would be approved.

In addition, the Company intends to submit its Marketing Authorization Application (MAA) for rucaparib to the European Medicines Agency for a comparable ovarian cancer treatment indication in Q4 2016.

We have completed target enrollment in the ARIEL3 pivotal maintenance study, with data expected to be available in approximately 12 months. Pending positive data, Clovis intends to follow up with supplemental NDAs for maintenance indications in tumor BRCA mutant patients and BRCA-like patients.

Clovis recently entered into a clinical trial collaboration with Genentech, a member of the Roche Group, to evaluate a novel combination therapy of Genentech’s investigational cancer immunotherapy atezolizumab (MPDL3280A; anti-PDL1) and rucaparib for the treatment of gynecological cancers, with a focus on ovarian cancer. The Phase 1b trial is planned to begin enrolling patients during the second half of 2016.

Also during the second half of 2016, the Company intends to initiate a study of rucaparib in metastatic castrate-resistant BRCA mutant (inclusive of germline and somatic) prostate cancer patients, as well as the ARIEL4 confirmatory study in advanced ovarian cancer.

Rociletinib

In a recent meeting with the FDA, Clovis was notified that it could anticipate receiving a Complete Response Letter (CRL) for the rociletinib NDA on or before the PDUFA date of June 28, 2016. The FDA issues a CRL to indicate that their review of an application is complete and that the application is not ready for approval. In anticipation of receiving the CRL, Clovis has terminated enrollment in all ongoing sponsored clinical studies of rociletinib. Clovis will continue to provide drug to patients whose clinicians recommend continuing rociletinib therapy. In addition, Clovis has withdrawn its MAA for rociletinib previously filed with European regulatory authorities. Related to terminating enrollment in all ongoing sponsored clinical studies of rociletinib, Clovis is reducing its staff, eliminating contractor positions and delaying or eliminating planned new positions. This will result in the reduction of our staff and contractor positions by 35 percent by the end of 2016, compared to year-end 2015.

However, we intend to maintain the U.S. sales force in preparation for the potential U.S. launch of rucaparib. Clovis has determined there would be effectively no cost savings in eliminating the U.S. sales force and replacing it with a contract organization to support the potential U.S. launch of rucaparib in Q4 2016 or Q1 2017. In addition, a decision to use a contract sales organization could potentially delay the timing of the U.S. launch.

Lucitanib

Enrollment was completed during the first quarter in the ongoing Phase 2 study exploring lucitanib in patients with treatment-refractory breast cancer. In parallel with Clovis’ sponsored study, 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 expects to make a decision regarding the future development of lucitanib by the end of 2016.

About Rucaparib

Rucaparib is an oral, potent small molecule inhibitor of PARP1-3 being developed for the treatment of ovarian cancer, specifically in patients with tumors with BRCA mutations and other DNA repair deficiencies beyond BRCA, including those with high genomic loss of heterozygosity (LOH) commonly referred to as "BRCA-like." Clovis is also exploring rucaparib in other solid tumor types with significant BRCA and BRCA-like populations, including prostate, breast and gastroesophageal cancers. Rucaparib was granted Breakthrough Therapy designation by the U.S. FDA in April 2015. Clovis holds worldwide rights for rucaparib.

About Rociletinib

Rociletinib is an oral, mutant-selective inhibitor of epidermal growth factor receptor (EGFR). Rociletinib targets the activating mutations of EGFR (L858R and Del19), while also inhibiting the dominant acquired resistance mutation, T790M. Clovis holds worldwide rights for rociletinib.

About Lucitanib

Lucitanib is an oral, potent inhibitor of the tyrosine kinase activity of vascular endothelial growth factor receptors 1 through 3 (VEGFR1-3), platelet-derived growth factor receptors alpha and beta (PDGFRα-β) and fibroblast growth factor receptors 1 through 3 (FGFR1-3). 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 advanced breast cancer.

On May 05, 2016 Celldex Therapeutics, Inc. (NASDAQ:CLDX) reported business and financial highlights for the first quarter ended March 31, 2016 (Press release, Celldex Therapeutics, MAY 5, 2016, View Source [SID:1234511977]).

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"While the recent setback of the RINTEGA program was certainly a disappointment, the Company is focused on executing across the breadth and depth of our pipeline, including six ongoing company-led clinical trials—the pivotal METRIC study in triple negative breast cancer, two Phase 2 studies across a broad range of indications and multiple Phase 1/2 studies that are actively enrolling patients," said Anthony Marucci, Co-founder, President and Chief Executive Officer of Celldex Therapeutics.

"To this end, Celldex and our collaborators presented seven posters at the recent AACR (Free AACR Whitepaper) meeting across multiple compounds in our pipeline and introduced a new preclinical program that has identified promising agonist antibodies targeting the CD40 receptor. Most importantly, we reported favorable safety and immune monitoring data from the Phase 1 study of varlilumab and Opdivo. The Phase 2 study enrolled its first patients last month and will continue to add to a wealth of data slated for presentation later in 2016 and throughout 2017, including the presentation of Phase 2 data from the glembatumumab vedotin study in metastatic melanoma later this year. With the recent realignment of our pipeline, we believe our current cash position will carry us through the first half of 2018, allowing us to read out all current ongoing studies and to initiate several new studies, as well," concluded Marucci.

Program Updates:

RINTEGA ("rindopepimut"; "rindo"; CDX-110), an EGFRvIII(v3)-specific therapeutic vaccine for glioblastoma (GBM)

In March, Celldex announced that the independent Data Safety and Monitoring Board (DSMB) determined, based on a preplanned interim analysis, that continuation of the Phase 3 ACT IV study of RINTEGA in patients with newly diagnosed EGFRvIII-positive glioblastoma would not reach statistical significance for overall survival in patients with minimal residual disease, the primary endpoint of the study, as both the RINTEGA arm and the control arm were performing on par with each other. In the ACT IV study, RINTEGA performed consistently with prior Phase 2 studies, but the control arm significantly outperformed expectations. Based on this recommendation, Celldex discontinued the study and does not anticipate incurring substantial additional costs related to RINTEGA at this time. The Company is conducting an analysis of the data and plans to present the study at a future scientific/medical meeting or in a peer-reviewed publication. All patients on the RINTEGA arm of the ACT IV study, prior Phase 2 studies and existing compassionate use recipients have been offered ongoing access to RINTEGA on a compassionate use basis.
Glembatumumab vedotin ("glemba"; CDX-011), an antibody-drug conjugate (ADC) targeting gpNMB in multiple cancers

Enrollment continues in the Company’s Phase 2b randomized study (METRIC) of glembatumumab vedotin in patients with metastatic triple negative breast cancers that overexpress gpNMB, a molecule associated with poor outcomes for triple negative breast cancer patients and the target of glembatumumab vedotin. Enrollment is open across the United States, Canada, and Australia and recently opened in the European Union, with the goal of completing enrollment by year-end 2016.
Patient enrollment is complete in the Phase 2 single-agent study of glembatumumab vedotin in metastatic melanoma. The Company is currently amending the protocol to add a second cohort of patients to a glembatumumab vedotin and varlilumab combination arm to assess the potential clinical benefit of the combination and to explore varlilumab’s potential biologic and immunologic effect when combined with an ADC. The Company expects to present data from the single-agent cohort at an appropriate medical meeting in the second half of 2016.
Celldex is also evaluating glembatumumab vedotin in other cancers in which gpNMB is expressed.
Celldex has entered into a collaborative relationship with PrECOG, LLC, which represents a research network established by the Eastern Cooperative Oncology Group (ECOG), and PrECOG, LLC is conducting a Phase 1/2 study in squamous cell lung cancer. This study opened to enrollment in April 2016.
Celldex and the National Cancer Institute (NCI) have entered into a Cooperative Research and Development Agreement (CRADA) under which the NCI is sponsoring two studies of glembatumumab vedotin—one in uveal melanoma and one in pediatric osteosarcoma. Both studies are currently open to enrollment.
Data enhancing the understanding of glembatumumab vedotin’s mechanism of action and further validation of the overexpression of its target, gpNMB, in a wide range of tumor types were presented at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2016 in April. Using a validated immunohistochemistry (IHC) assay to detect the expression of gpNMB, the Company examined tissues from multiple types of solid tumors and normal tissue. Overexpression of gpNMB in samples of tumor tissue versus normal tissue was found in squamous cell carcinoma of the lung (85%), osteosarcoma (62%), pancreatic cancer (55%), lung adenocarcinoma (45%) and squamous cell carcinoma of the head and neck (40%). These results support the potential broad applicability of gpNMB as a therapeutic target across a wide range of tumor types. In addition, in a preclinical study investigating resistance mechanisms in melanoma, glembatumumab vedotin demonstrated synergies with therapies for BRAF mutated melanoma and overcame phenotypes associated with resistance, suggesting use of glembatumumab vedotin may be particularly effective as a single-agent or in combination in this refractory patient population.
Varlilumab ("varli"; CDX-1127), a fully human monoclonal agonist antibody that binds and activates CD27, a critical co-stimulatory molecule in the immune activation cascade

The Phase 2 portion of the varlilumab and nivolumab (Opdivo) study opened to enrollment in April 2016. The study includes cohorts in advanced non-small cell lung cancer (n=35), colorectal cancer (n=18), ovarian cancer (n=18), head and neck squamous cell carcinoma (n=18), renal cell carcinoma (n=25) and glioblastoma (n=20). The study is being conducted by Celldex under a clinical trial collaboration with Bristol-Myers Squibb Company. The companies are sharing development costs.
Data were presented from the Phase 1 portion of the varlilumab and nivolumab study in a poster at the AACR (Free AACR Whitepaper) Annual Meeting in April 2016. The Phase 1 portion of the study, conducted in patients with solid tumors, has completed enrollment (n=36) and primarily enrolled patients with colorectal and ovarian cancer. The primary objective of the Phase 1 portion of the study was to evaluate the safety and tolerability of the combination.
The combination showed acceptable tolerability and safety across all dose levels without any evidence of increased autoimmunity or inappropriate immune activation.
Marked changes in the tumor microenvironment including increased infiltrating CD8+ T cells and increased PD-L1 expression, which have been shown to correlate with a greater magnitude of treatment effect from checkpoint inhibitors in other clinical studies, were observed.
Additional favorable immune biomarkers, such as increase in inflammatory chemokines and decrease in T regulatory cells, were also noted.
In a subset of patients (n=17) on study who had both pre- and post-tumor biopsies available, preliminary evidence suggest a correlation between biomarker data and stable disease or better in seven of these patients (4 ovarian cancer, 2 colorectal cancer, 1 squamous cell carcinoma of the head and neck).
The Phase 1/2 study of varlilumab and atezolizumab (anti-PDL1) is currently enrolling patients with multiple solid tumors in the dose escalation Phase 1 portion of the study. The Phase 2 portion of the study will be conducted in renal cell carcinoma. This study is being conducted by Celldex under a clinical trial collaboration with Roche. Roche is providing study drug, and Celldex is responsible for conducting and funding the study.
Additional combination studies of varlilumab continue to enroll patients including:
A Phase 1/2 safety and tolerability study examining the combination of varlilumab and sunitinib (Sutent) in patients with metastatic clear cell renal cell carcinoma (CC-RCC).
A Phase 1/2 safety and tolerability study examining the combination of varlilumab and ipilimumab (Yervoy) in patients with stage III or IV metastatic melanoma. In the Phase 2 portion of the study, patients with tumors that express NY-ESO-1 will also receive Celldex’s CDX-1401, an NY-ESO-1-antibody fusion protein for immunotherapy.
CDX-1401, an NY-ESO-1-antibody fusion protein for immunotherapy

As discussed above, a Phase 1/2 study examining the combination of varlilumab and ipilimumab continues to enroll patients with stage III or IV metastatic melanoma. In the Phase 2 portion of the study, patients with tumors that express NY-ESO-1 will also receive CDX-1401.
Celldex continues to support several external collaborations, including an NCI sponsored Phase 2 study of CDX-1401 and CDX-301 for patients with metastatic melanoma, which has completed enrollment. Based on results to date, plans for additional studies are being considered by NCI. Additionally, Roswell Park Cancer Center is conducting an investigator sponsored study evaluating CDX-1401, poly-ICLC (Hiltonol) and the IDO1 inhibitor epacadostat (INCB24360) in patients in remission with ovarian, fallopian tube or primary peritoneal cancer. Patients’ tumors must have expressed NY-ESO-1 or the LAGE-1 antigen to be eligible for the study. Celldex is providing CDX-1401 and poly-ICLC in support of this study.
CDX-301 (recombinant human Flt3L), a potent hematopoietic cytokine that uniquely expands dendritic cells and hematopoietic stem cells

The Company presented early data from the pilot study of CDX-301 alone and in combination with plerixafor (Mozobil) in hematopoietic stem cell transplantation (HSCT) in February at the annual meeting of the American Society for Blood and Marrow Transplantation (ASBMT). Data on three donor/patient pairs from the non-plerixafor treated arm showed that CDX-301 given as a single agent was well tolerated and effective at mobilizing hematopoietic stem cells in healthy donors. The stem cell graft contained notable increases in naïve lymphocytes and plasmacytoid dendritic cells consistent with preclinical data suggesting a possible better outcome. Recipients experienced successful engraftment in an expected time frame. Given that hematopoietic stem cell transplantation is outside of Celldex’s core focus, in an effort to prioritize human and capital resources, the Company has decided not to advance CDX-301 in this particular indication at this time and instead to focus near-term efforts on its potential role in combination immunotherapy.
CDX-301’s potential activity is being explored in a Phase 1/2 study of CDX-301 and poly-ICLC in combination with low-dose radiotherapy in patients with low-grade B-cell lymphomas conducted by the Icahn School of Medicine at Mount Sinai.
First Quarter 2016 Financial Highlights and Updated 2016 Guidance

Cash position: Cash, cash equivalents and marketable securities as of March 31, 2016 were $254.0 million compared to $289.9 million as of December 31, 2015. The decrease was primarily driven by our first quarter cash used in operating activities of approximately $34.9 million. As of March 31, 2016 Celldex had 98.7 million shares outstanding.

Revenues: Total revenue was $1.3 million in the first quarter of 2016, compared to $0.5 million for the comparable period in 2015. The increase in revenue was primarily due to our clinical trial collaboration with Bristol-Myers Squibb, our research and development agreement with Rockefeller University and an increase in grant revenue.

R&D Expenses: Research and development (R&D) expenses were $27.4 million in the first quarter of 2016, compared to $25.1 million for the comparable period in 2015. The increase in R&D expenses was primarily attributable to increased headcount.

G&A Expenses: General and administrative (G&A) expenses were $9.3 million in the first quarter of 2016, compared to $6.1 million for the comparable period in 2015. The increase in G&A expenses was primarily due to higher stock-based compensation of $1.1 million, increased headcount, and RINTEGA and glembatumumab vedotin commercial planning costs.

Net loss: Net loss was $34.7 million, or ($0.35) per share, for the first quarter of 2016, compared to a net loss of $30.2 million, or ($0.33) per share, for the comparable periods in 2015.

Financial guidance: Celldex expects that its cash, cash equivalents and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements through the first half of 2018.

RINTEGA is a registered trademark of Celldex Therapeutics. Opdivo and Yervoy are registered trademarks of Bristol-Myers Squibb. Sutent is a registered trademark of Pfizer. Mozobil is a registered trademark of sanofi-aventis U.S. LLC. Hiltonol is a registered trademark of Oncovir.

On May 05, 2016 BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) reported financial results for the first quarter ended March 31, 2016 (Press release, BioCryst Pharmaceuticalsa, MAY 5, 2016, View Source [SID:1234511974]).

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"We are currently working through the start-up activities for the APeX-1 trial of BCX7353 for prevention of angioedema attacks in HAE patients and are targeting the end of the year to report results," said Jon P. Stonehouse, President & Chief Executive Officer. "In addition, we are conducting a Phase 1 clinical pharmacology study in healthy volunteers to determine if we are able to meaningfully increase exposure and get to a twice-daily oral dosage form of avoralstat. We expect to report results from this study this summer."

First Quarter Financial Results
For the three months ended March 31, 2016, revenues decreased to $4.8 million from $6.8 million in the first quarter of 2015. The decrease was primarily due to lower collaborative revenue associated with BCX4430 development under the advanced development contract with the Biomedical Advanced Research and Development Authority (BARDA/HHS) awarded in March 2015. In the first quarter of 2015, the Company recorded $537,000 in RAPIVAB revenue, representing drug sold under the sell-through revenue recognition methodology. No RAPIVAB revenue was received in the first quarter 2016 as RAPIVAB commercialization is now being handled by Seqirus UK Limited (Seqirus).

Research and Development (R&D) expenses for the first quarter of 2016 increased to $20.6 million from $17.1 million in the first quarter of 2015. The R&D expense increase in 2016 resulted primarily from higher development costs associated with the Company’s hereditary angioedema (HAE) programs, as well as ongoing post approval clinical trials of RAPIVAB in both pediatric and elderly/high risk influenza patient populations.

General and administrative (G&A) expenses for the first quarter of 2016 decreased to $3.2 million compared to $4 .1 million for the first quarter of 2015. G&A expenses decreased in 2016 due to a significant reduction in unrestricted grants, as well as the elimination of marketing and commercial consulting expense in 2016, as RAPIVAB is now being commercialized by Seqirus.

Interest expense, which is primarily related to non-recourse notes, was $1.5 million in the first quarter of 2016 and $1.3 million in the first quarter of 2015. Also, a $2.8 million mark-to-market loss on the Company’s foreign currency hedge was recognized in the first quarter of 2016, as compared to a $464,000 mark-to-market gain in the first quarter of 2015. The change in the dollar/yen exchange rate between the quarters resulted in a $3.2 million increase to the Company’s net loss for the first quarter of 2016 as compared to 2015. These gains and losses result from periodic changes in the U.S. dollar/Japanese yen exchange rate and the related mark-to-market valuation of our underlying hedge arrangement.

The net loss for the first quarter of 2016 was $22.8 million, or $0.31 per share, compared to a net loss of $15.2 million, or $0.21 per share, for the first quarter 2015.

Cash, cash equivalents and investments totaled $78.9 million at March 31, 2016. Net operating cash use for the first quarter of 2016 was $22.4 million, as compared to $3.8 million for the first quarter of 2015. The first quarter of 2016 is expected to be the largest cash consumption quarter of the four quarters in 2016, and BioCryst expects to remain within previously issued cash use guidance.

Clinical Development Update & Outlook
BioCryst expects to report results of the APeX-1 clinical trial of the once-daily, second generation HAE compound, BCX7353, for prevention of angioedema attacks in HAE patients by year end.

A Phase 1 clinical pharmacology trial testing multiple avoralstat formulations is ongoing in healthy subjects with the aim to develop a twice-daily dosage for HAE patients. Pharmacokinetic results are expected this summer.

BioCryst has completed the Phase 1 clinical trial of single and multiple ascending doses of its broad spectrum antiviral BCX4430 administered by intramuscular (i.m.) injection in healthy volunteers. BCX4430 by i.m. injection was generally safe and well tolerated through doses up to 10mg/kg daily for seven days, the maximum dose planned in the trial.

Nonclinical experiments are continuing with BCX4430 in a model of Zika virus infection in interferon-receptor-deficient mice. Studies conducted to date have shown improved survival with dosing delayed up to 7 days after virus challenge, reduction in viral titer in the blood, and development of protective immunity in surviving animals. This research has been conducted in collaboration with Utah State University and NIAID.

In January, BioCryst submitted a New Drug Submission (NDS) for RAPIVAB in Canada, seeking approval for the treatment of acute uncomplicated influenza in adult patients.

Financial Outlook for 2016
Based upon development plans and our awarded government contracts, BioCryst expects its 2016 net operating cash use to be in the range of $55 to $75 million, and its 2016 operating expenses to be in the range of $78 to $98 million. Our operating expense range excludes equity-based compensation expense due to the difficulty in reliably projecting this expense, as it is impacted by the volatility and price of the Company’s stock, as well as by the vesting of the Company’s outstanding performance-based stock options.

On May 05, 2016 Athersys, Inc. (Nasdaq:ATHX) reported its financial results for the three months ended March 31, 2016 (Press release, Athersys, MAY 5, 2016, View Source [SID:1234511972]).

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Highlights of the first quarter of 2016 and recent events include:

Announced positive one-year follow-up results from the Phase 2 study of MultiStem cell therapy to treat ischemic stroke – demonstrating progressive improvements and significantly higher rate of excellent outcomes at one year for MultiStem-treated patients – with greater benefits for patients receiving MultiStem treatment within 36 hours of the stroke;
Established collaboration with HEALIOS K.K. ("Healios") to develop MultiStem cell therapy for stroke in Japan, which included an upfront payment of $15 million, additional potential milestone payments aggregating up to $225 million, double-digit royalties on product sales and an option for Healios to expand the collaboration to include acute respiratory distress syndrome ("ARDS") and another indication with a $10 million expansion payment and additional associated milestone payments and royalties;
Advanced preparations for next stroke trials, including working with Healios to reach agreement with the Japanese Pharmaceuticals and Medical Devices Agency ("PMDA") on study design to potentially clear the way for a Japanese investigational new drug ("J-IND") filing and subsequent trial launch, and engaging with other regulators about requirements for the Company’s planned international stroke study;
Continued enrollment of Phase 2a study evaluating administration of MultiStem therapy to ARDS patients, and Phase 2 acute myocardial infarction ("AMI") study, evaluating and taking measures to accelerate enrollment;
Recorded revenues of $15.5 million for quarter ended March 31, 2016, reflecting the recognition of the $15.0 million license fee payment from Healios, and net income of $4.8 million; and
Ended the quarter with $30.4 million in cash and cash equivalents.
"We remain very excited about our ischemic stroke program," stated Dr. Gil Van Bokkelen, Chairman & CEO at Athersys. "As we have presented at several conferences, we have seen that MultiStem treatment has the potential to help ischemic stroke victims, especially those who can be treated within 36 hours following the stroke. We were especially pleased with the one-year follow-up results, which showed continued and significant functional improvement with MultiStem treatment. As a result, we are moving forward diligently with clinical development in Japan with our partner Healios, and with planning for a corresponding study in the United States and Europe, focused on MultiStem treatment within 36 hours of the stroke.

"Our partnership with Healios is off to a strong start," continued Dr. Van Bokkelen. "Building from our previous engagement with the PMDA and with our support, Healios has reached general agreement with the PMDA about trial design and requirements. Healios is preparing its J-IND filing and planning for the subsequent launch of its planned study, and we are engaged in manufacturing to support their clinical product requirements. Based on discussions with the PMDA, we believe that a successful trial in Japan could make contingent, or even full, approval possible, utilizing Japan’s progressive regulations for the development and approval of regenerative medicine products.

"We are also fully engaged in planning and preparing for an international ischemic stroke study focused in the United States and several European countries. Upcoming discussions with the U.S. Food and Drug Administration and other regulators will help us refine and finalize the trial design and complete trial preparations," noted Dr. Van Bokkelen.

"We are also enrolling our two grant-supported Phase 2 trials, in AMI and ARDS, although progress has been slower than we have anticipated," commented Dr. Van Bokkelen. "We have undertaken a number of actions to accelerate enrollment, including adding clinical sites. We believe that MultiStem cell therapy is well-suited to treat these acute conditions based on our preclinical and clinical experience to date, and we are motivated to move these studies forward expeditiously.

"We continue to focus on other important areas, including actively exploring partnering opportunities around multiple programs. Finally, we have a substantial effort underway in manufacturing and process development focused, first, on supplying our planned clinical studies, and second, on advancing our manufacturing platform and related capabilities to support high-volume, low-cost production important to commercialization," concluded Dr. Van Bokkelen.

First Quarter Results

For the three months ended March 31, 2016, total revenues were $15.5 million compared to $0.7 million in the same period in 2015, reflecting the recognition of $15.0 million in contract revenue from our Healios collaboration in the first quarter of 2016. Grant revenue was $0.3 million less in the first quarter of 2016 compared to the same period in 2015, and grant revenues may fluctuate from period to period based on the timing of grant-related activities and the award and expiration of new grants.

Research and development expenses increased to $6.7 million in the 2016 first quarter from $5.7 million in the 2015 first quarter, primarily due to increased clinical and preclinical development costs, including process development activities to support manufacturing. General and administrative expenses were relatively consistent at $2.0 million and $1.9 million for the three months ended March 31, 2016 and 2015, respectively.

We recognized net income for the three months ended March 31, 2016 of $4.8 million compared to net loss of $12.5 million for the same period in 2015. The $17.2 million net variance includes the impact of the $15.0 million Healios license revenue, the $0.3 million decrease in grant revenues, the $1.1 million increase in combined R&D and G&A expenses, a $3.4 million decrease in non-cash expense from the change in the fair value of our warrant liabilities, and a $0.2 million increase in net other income. Cash provided in operating activities was $7.3 million during the 2016 first quarter (reflecting $14.8 million of cash received from Healios), compared to $1.1 million in the 2015 first quarter (including $8.0 million of cash received from our former collaborator, Chugai Pharmaceutical Co., Ltd). As of March 31, 2016, we had $30.4 million in cash and cash equivalents, compared to $23.0 million at December 31, 2015.