On November 10, 2015 Aptose Biosciences Inc. (Nasdaq:APTO) (TSX:APS), a clinical-stage company developing new therapeutics and molecular diagnostics that target the underlying mechanisms of cancer, reported two collaborations that will provide exclusive access to new epigenetic therapeutics for the Company’s oncology pipeline (Press release, Aptose Biosciences, NOV 10, 2015, View Source;p=irol-newsArticle&ID=2110973 [SID:1234508436]). These partnerships have been strategically formed to leverage Aptose’s scientific and clinical expertise in cancer and hematologic diseases to develop mechanistically differentiated and high-value epigenetic drug candidates.

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Strategic Collaboration with Moffitt Cancer Center

Aptose has entered into a definitive agreement with Moffitt Cancer Center for exclusive global rights to potent, multi-targeting, single-agent inhibitors for the treatment of hematologic and solid tumor cancers. These small molecule agents are highly differentiated inhibitors of the Bromodomain and Extra-Terminal motif (BET) protein family members, which simultaneously target specific kinase enzymes. The molecules developed by Moffitt exhibit single-digit nanomolar potency against the BET family members and specific oncogenic kinases which, when inhibited, are synergistic with BET inhibition. Under the agreement, Aptose will gain access to the drug candidates developed by Moffitt and the underlying intellectual property covering the chemical modifications enabling potent bromodomain (BRD) inhibition on the chemical backbone of a kinase inhibitor. Aptose expects lead clinical candidates to emerge from the collaboration by late 2016.

Transcriptional dysregulation in cancer cells may occur through various means, including chromatin remodeling, histone modification and super-enhancer formation. The bromodomain proteins play a critical role in this dysregulation, and hence targeting specific bromodomains represents a validated treatment approach for various cancers. Aptose is committed to developing a pipeline of molecules that inhibit key epigenetic targets with the potential to intervene in oncogenesis and induce remission.

"We’ve built an oncology drug development organization with valuable ties to leading clinical centers and thought leaders," said William G. Rice, Ph.D., Chairman, President and CEO, "and we are exceptionally pleased to partner with Moffitt on advancing new epigenetic inhibitors, specifically bromodomain inhibitors that simultaneously inhibit specific kinases in key regulatory pathways."

"Aptose views a multi-targeting approach, which incorporates bromodomain inhibition, as an exciting means to enhance efficacy and diminish therapeutic resistance relative to the current landscape in cancer treatment. This is even more beneficial when inhibition of the pathways is highly synergistic. The researchers at Moffitt have made unprecedented progress in this field," continued Dr. Rice.

"We view the advancement of epigenetic multi-inhibitors as a highly promising strategy in the treatment of cancer," said the principal investigators Ernst Schonbrunn, Ph.D. and Nicholas Lawrence, Ph.D., members of the Drug Discovery Program at Moffitt, "and targeting broad-acting epigenetic regulators of transcription like bromodomain proteins is needed to suppress the induction of gene expression that results when cancer cells respond to kinase inhibitors."

"We are excited to work with an organization as scientifically driven to develop novel therapeutics as Aptose," said Haskell Adler, Ph.D., MBA, Senior Licensing Manager at Moffitt.

Exclusive Agreement with Laxai Avanti Life Sciences

Aptose today also announced an exclusive drug discovery partnership with Laxai Avanti Life Sciences (LALS) for their expertise in next generation epigenetic-based therapies. Under the agreement, LALS will be responsible for developing multiple clinical candidates, including optimizing candidates derived from Aptose’s relationship with the Moffitt Cancer Center. Aptose will own global rights to all newly discovered candidates characterized and optimized under the collaboration, including all generated intellectual property.

"We have identified LALS as an organization with high-caliber medicinal chemistry and with robust, and highly efficient drug discovery capabilities that complement our capabilities at Aptose," said Dr. Rice. "These collaborations are designed to build upon insights into the epigenetic field that were informed by the mechanism of APTO-253. As we continue to advance APTO-253 into late-stage clinical development, we are committed to creating and acquiring additional differentiated agents and building a staged oncology pipeline behind APTO-253."

About APTO-253

Epigenetic suppression of the KLF4 gene has been reported in the scientific literature as a key transforming event in AML and high-risk myelodysplastic syndromes. APTO-253, Aptose’s lead drug candidate, is a first-in-class inducer of the Krüppel-like factor 4 (KLF4) tumor suppressor gene, and the only clinical-stage compound targeted for patients with suppressed KLF4 levels. APTO-253 has demonstrated a favorable safety profile with no evidence of bone marrow suppression. Preclinical studies have shown potent single-agent activity and an opportunity for combination therapy with a variety of anti-cancer therapeutics. The drug candidate is in a Phase 1b clinical study in patients with relapsed or refractory hematologic malignancies.

About Moffitt Cancer Center

Located in Tampa, Moffitt is one of only 45 National Cancer Institute-designated Comprehensive Cancer Centers, a distinction that recognizes Moffitt’s excellence in research, its contributions to clinical trials, prevention and cancer control. Moffitt is the top-ranked cancer hospital in Florida and has been listed in U.S. News & World Report as one of the "Best Hospitals" for cancer care since 1999. With more than 4,600 team members, Moffitt has an economic impact in the state of $1.9 billion. For more information, visit MOFFITT.org, and follow the Moffitt momentum on Facebook, Twitter and YouTube.

About Laxai Avanti Life Sciences

Laxai Avanti Life Sciences (LALS) was established in 2007 with a vision to innovate and accelerate the drug discovery campaigns of global pharmaceutical companies. The goal of LALS is to provide intelligent solutions to global pharmaceutical and biotechnological companies by providing high quality services with accelerated timelines. LALS provides a one-stop service for pharmaceutical and biotechnology companies around the globe to accelerate drug discovery programs. LALS current client base includes Biopharmaceutical, Agrochemical and Specialty Chemical Companies in Europe and the US.

About Aptose Biosciences

Aptose Biosciences is a clinical-stage biotechnology company committed to discovering and developing personalized therapies addressing unmet medical needs in oncology. Aptose is advancing new therapeutics focused on novel cellular targets on the leading edge of cancer research, coupled with companion diagnostics to identify the optimal patient population for our products. The Company’s small molecule cancer therapeutics pipeline includes products designed to provide enhanced efficacy with existing anti-cancer therapies and regimens without overlapping toxicities. Aptose Biosciences Inc. is listed on NASDAQ under the symbol APTO and on the TSX under the symbol APS.

On November 10, 2015 Exelixis, Inc. (Nasdaq: EXEL) reported financial results for the third quarter of 2015 and provided an update on progress toward delivering upon its key 2015 corporate objectives and clinical development milestones (Press release, Exelixis, NOV 10, 2015, View Source;p=RssLanding&cat=news&id=2111224 [SID:1234508190]).

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Key Priorities and Corporate Updates

Following release of positive results from the pivotal METEOR trial, Exelixis is focused on expediting its regulatory submissions and augmenting its commercial infrastructure to support the potential launch of its lead compound, cabozantinib, in advanced renal cell carcinoma (RCC) in the United States. At the same time, in support of its collaboration partner, Genentech, a member of the Roche Group, Exelixis is rolling out its portion of the U.S. sales force promoting COTELLICTM (cobimetinib), a second Exelixis-discovered compound, following recent regulatory approvals for the compound in combination with vemurafenib for the treatment of BRAF V600 mutation-positive unresectable or metastatic melanoma in the United States and Switzerland.

Cabozantinib Highlights

METEOR Trial Delivers Positive Results in Advanced RCC; Cabozantinib Granted Breakthrough Therapy Designation. In July 2015, Exelixis announced that METEOR met its primary endpoint, demonstrating a statistically significant improvement in progression-free survival (PFS) for cabozantinib versus everolimus in a population of patients with advanced RCC who have experienced disease progression following treatment with at least one prior VEGFR tyrosine kinase inhibitor. Based on these data, the FDA granted Breakthrough Therapy Designation to cabozantinib as a potential treatment for patients with advanced RCC who have received one prior therapy. In September 2015, detailed data from METEOR were published in The New England Journal of Medicine and also presented during the Presidential Session I at the European Cancer Congress in Vienna, Austria.

Progress on U.S. and EU Regulatory Filings for Cabozantinib in Advanced RCC. Based on the data from the METEOR trial, in October 2015, Exelixis initiated the rolling submission of its New Drug Application (NDA) in the United States. Exelixis expects to complete the U.S. filing before the end of 2015. In the European Union, the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) has granted accelerated assessment to cabozantinib for advanced RCC. As a result, when filed, the company’s Marketing Authorization may be eligible for a 150-day review, versus the standard 210 days (excluding clock stops when written or oral information is requested from CHMP). Exelixis expects to complete the EU filing in early 2016.

Results from a Randomized Phase 2 Trial in First-Line RCC Expected in the First Half 2016. The randomized phase 2 trial comparing cabozantinb versus sunitinib in the treatment of first-line intermediate or poor risk RCC patients, CABOSUN, completed enrollment in early 2015 and results for the primary endpoint of PFS are now expected in the first half of 2016. CABOSUN is being conducted by The Alliance for Clinical Trials in Oncology as part of Exelixis’ collaboration with the National Cancer Institute’s Cancer Therapy Evaluation Program (NCI-CTEP).

Trial Underway Evaluating Cabozantinib with Immunotherapies. In July 2015, Exelixis’ collaborators at NCI-CTEP initiated a phase 1 trial of cabozantinib in combination with nivolumab alone, or in combination with nivolumab plus ipilimumab, in patients with genitourinary tumors, including bladder cancer and RCC. The primary endpoint of the trial is the determination of dose-limiting toxicities and a recommended phase 2 dose for the combinations. Exelixis believes that there is a strong rationale for combining cabozantinib with immunotherapies, including clinical evidence of cabozantinib’s ability to create a more immune-permissive environment, as well as preclinical data suggesting cabozantinib increases T-cell infiltration into tumors. Data from this trial could have relevance in other disease settings, including non-small cell lung cancer (NSCLC).

Cobimetinib Highlights

Regulatory Progress for COTELLIC in Europe, Including Approval in Switzerland and Positive Opinion Issued by the European Medicines Agency’s CHMP. On August 27, 2015, Exelixis announced that Swissmedic, the Swiss licensing and supervisory authority, approved COTELLIC for use in combination with vemurafenib as a treatment for patients with advanced melanoma. In September 2015, the European Medicines Agency’s CHMP adopted a positive opinion of Roche’s Marketing Authorization Application for COTELLIC in combination with vemurafenib for the treatment of BRAF V600 mutation-positive unresectable or metastatic melanoma. The European Commission is expected to release its final opinion by the end of 2015. Under the terms of the collaboration agreement with Roche and Genentech, Exelixis will receive royalties on sales of COTELLIC outside of the United States.

Positive Overall Survival Data for Cobimetinib in Combination with Vemurafenib in Advanced Melanoma. In October 2015, Exelixis announced that the phase 3 coBRIM trial of cobimetinib in combination with vemurafenib met its secondary endpoint of demonstrating a statistically significant and clinically meaningful increase in overall survival for patients with unresectable locally advanced or metastatic melanoma carrying the BRAF V600 mutation. These data will be the subject of a presentation at the Society for Melanoma Research 2015 Congress taking place in San Francisco, November 18-21, 2015.

Regulatory Approval for COTELLIC in the United States. Today, Exelixis announced that the U.S. FDA approved cobimetinib for use in combination with vemurafenib as a treatment for patients with BRAF V600 mutation-positive advanced melanoma. COTELLIC is expected to be available within two weeks. Exelixis is entitled to an initial equal share of U.S. profits and losses, which will decrease as sales increase, and shares in the U.S. sales and marketing costs, including co-promoting COTELLIC in the U.S.

Corporate Highlights

Key Hires in Medical Affairs, Sales, and Marketing. In September 2015, the company announced three high-level appointments to support the commercialization of cabozantinib and cobimetinib: William Berg, M.D. joined the company as Senior Vice President of Medical Affairs, Jonathan Berndt as Vice President of Sales, and Gregg Bernier as Vice President of Marketing.

Public Offering of Stock Raises Net Proceeds of Approximately $145.6 Million. In late July 2015, Exelixis launched and completed a public offering of common stock. The company issued 28,750,000 shares, including 3,750,000 shares issued under the underwriters’ 30-day option to buy shares, at a price to the public of $5.40 per share, receiving approximately $145.6 million in net proceeds after deducting the underwriting discount and other estimated offering expenses payable by Exelixis. Exelixis currently expects to use the net proceeds from the offering for general corporate purposes, including for clinical trials, build-out of commercial infrastructure, research and development, capital expenditures and working capital.

"Over the last few months, we have made significant strides with our lead development program, cabozantinib in advanced RCC, including receiving Breakthrough Therapy Designation from the FDA, initiating our rolling NDA submission and obtaining accelerated assessment status from the European Medicines Agency’s CHMP," said Michael M. Morrissey, Ph.D., president and chief executive officer of Exelixis. "At the same time, we have significantly strengthened our organization’s capabilities, including the addition of high-level personnel in medical affairs, sales, and marketing in advance of the potential commercialization of cabozantinib in advanced RCC."

Dr. Morrissey continued: "Moreover, after the third quarter closed, Exelixis achieved a major milestone when COTELLIC became the second medicine to emerge from our research and development organization that has received FDA approval. We are excited to embark on the launch of COTELLIC in the U.S., working closely with our partners Genentech and Roche to commercialize the product, including fielding one quarter of the U.S. sales force."

2015 Financial Guidance. The company is refining its operating expense guidance for the second six months of 2015. We expect second half operating expenses to be at the upper end of the previously indicated $80 million to $90 million range including approximately $10 million of incremental non-cash stock-based compensation expense related to the vesting of performance stock options tied to the read-out of METEOR top-line results. As a result, we anticipate that our full year 2015 operating expenses will be near the upper end of the previously-indicated $150 million to $160 million range.

Third Quarter 2015 Financial Results

Net revenues for the quarter ended September 30, 2015 were $9.9 million, compared to $6.3 million for the comparable period in 2014. Net revenues for the third quarter of 2015 consisted of $6.9 million net product revenue related to the sale of COMETRIQ and $3.0 million of contract revenues for a milestone payment received from Merck related to their worldwide license of our PI3K-delta program.

Research and development expenses for the quarter ended September 30, 2015 were $26.1 million, compared to $43.6 million for the comparable period in 2014. The decrease was primarily related to a net decrease in clinical trial costs related to COMET and METEOR, the company’s phase 3 trials in metastatic castration-resistant prostate cancer and advanced RCC, and to a lesser degree, decreases in personnel related expenses resulting from an overall reduction in headcount. Those decreases were partially offset by an increase in stock-based compensation expense due to performance-based stock-options that vested as a result of the positive top-line data received from METEOR.

Selling, general and administrative expenses for the quarter ended September 30, 2015 were $17.8 million, compared to $9.9 million for the comparable period in 2014. The increase was primarily related to stock-based compensation expense due to the vesting of performance-based stock-options as a result of the positive top-line data received from the METEOR trial and higher marketing expenses, including expenses for cobimetinib under the company’s collaboration agreement with Genentech. Those increases were partially offset by a decrease in facilities costs and consulting and outside services.

Other income (expense), net for the quarter ended September 30, 2015 was a net expense of ($11.8) million compared to ($11.0) million for the comparable period in 2014. The net expense is comprised primarily of interest expense which includes $6.9 million of non-cash expense related to the accretion of the discounts on both the 4.25% Convertible Senior Subordinated Notes due 2019 and the company’s indebtedness under the Deerfield Notes for the quarter ended September 30, 2015, as compared to $7.5 million for the comparable period in 2014.

Net loss for the quarter ended September 30, 2015 was ($47.6) million, or ($0.22) per share, basic, compared to ($62.6) million, or ($0.32) per share, basic, for the comparable period in 2014. The decreased net loss for the quarter was primarily due to decreases in research and development expenses and an increase in net revenues, partially offset by an increase in selling, general and administrative expenses.

Cash and cash equivalents, short- and long-term investments and short- and long-term restricted cash and investments totaled $282.1 million at September 30, 2015 compared to $242.8 million at December 31, 2014.

On November 10, 2015 Roche (SIX: RO, ROG; OTCQX: RHHBY) reported that the U.S. Food and Drug Administration (FDA) approved Cotellic (cobimetinib) for the treatment of people with BRAF V600E or V600K mutation-positive unresectable or metastatic melanoma in combination with Zelboraf (vemurafenib) (Press release, Hoffmann-La Roche , NOV 10, 2015, View Source [SID:1234508191]). Cotellic and Zelboraf are not used to treat melanoma with a normal BRAF gene. Cotellic is Roche’s seventh new medicine approved by the FDA in the past five years.

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"When used in combination, Cotellic and Zelboraf help delay disease progression and help people live significantly longer than with Zelboraf alone," said Sandra Horning, M.D., Chief Medical Officer and Head of Global Product Development. "With this approval, people with this type of deadly and aggressive skin cancer now have a new targeted option."

Today’s FDA approval is based on results from the Phase III coBRIM study, which showed Cotellic plus Zelboraf reduced the risk of disease worsening or death (progression-free survival; PFS) by about half in people who received the combination [HR=0.56, 95 percent CI (0.45-0.70); p<0.001], with a median PFS of 12.3 months for Cotellic plus Zelboraf compared to 7.2 months with Zelboraf alone1. An interim analysis also showed the combination of Cotellic and Zelboraf helped people live significantly longer (overall survival; OS) than Zelboraf alone (HR=0.63, 95 percent CI 0.47-0.85; p=0.0019). The objective response rate (tumor shrinkage) was higher with Cotellic plus Zelboraf compared to Zelboraf alone (70 vs. 50 percent; p<0.001), as was the complete response rate (complete tumor shrinkage, 16 vs. 11 percent) 1.

Possible serious side effects with Cotellic include risk of skin cancers, increased risk of bleeding, heart problems that can lead to inadequate pumping of the blood by the heart, rash, eye problems, abnormal liver test or liver injury, increased levels of an enzyme in the blood, and photosensitivity. The most common side effects of Cotellic include diarrhea, sunburn or sun sensitivity, nausea, fever and vomiting. Cotellic can also cause changes in blood test results.

The final overall survival analysis from the coBRIM study will be presented at the Society for Melanoma Research 2015 International Congress (SMR) held in San Francisco, California from November 18-21.

In September, the Committee for Medicinal Products for Human Use (CHMP) at the European Medicines Agency (EMA) issued a positive opinion for Roche’s marketing authorization application for Cotellic in the European Union. A decision from the European Commission is expected before the end of 2015. Cotellic was approved in Switzerland by Swissmedic in August 2015.

About the coBRIM study
CoBRIM is an international, randomized, double-blind, placebo-controlled Phase III study evaluating the safety and efficacy of 60 mg once daily of Cotellic plus 960 mg twice daily of Zelboraf compared to 960 mg twice daily of Zelboraf plus placebo. In the study, 495 patients with BRAF V600 mutation-positive unresectable locally advanced or metastatic melanoma (detected by the cobas 4800 BRAF Mutation Test) and previously untreated for advanced disease were randomized to receive Zelboraf every day on a 28-day cycle plus either Cotellic or placebo on days 1-21. Treatment was continued until disease progression, unacceptable toxicity or withdrawal of consent. Investigator-assessed PFS is the primary endpoint. Secondary endpoints include PFS by independent review committee, objective response rate, overall survival, duration of response and other safety, pharmacokinetic and quality of life measures2.

About Cotellic plus Zelboraf
Cotellic and Zelboraf are prescription medicines used in combination to treat melanoma that has spread to other parts of the body or cannot be removed by surgery, and that has a certain type of abnormal "BRAF" gene. Found in approximately half of melanomas3, mutated BRAF causes abnormal signaling inside certain cancer cells leading to tumor growth4,5. Zelboraf is designed to inhibit some mutated forms of BRAF and Cotellic is designed to inhibit some forms of MEK. Both BRAF and MEK are proteins in a cell signaling pathway that help control cell growth and survival6. When used in combination, Cotellic and Zelboraf are thought to reduce cancer cell growth longer than with Zelboraf alone. A patient’s healthcare provider will perform a test to make sure Cotellic and Zelboraf are right for the patient. It is not known if Cotellic and Zelboraf are safe and effective in children under 18 years of age.

About melanoma
Melanoma is less common, but more aggressive and deadlier than other forms of skin cancer.,7,8 BRAF is mutated in approximately half of melanomas.3 When melanoma is diagnosed early, it is generally a curable disease,9,10 but most people with advanced melanoma have a poor prognosis.8 More than 232,000 people worldwide are currently diagnosed with melanoma each year.11 In recent years, there have been significant advances in treatment for metastatic melanoma and people with the disease have more options. However, it continues to be a serious health issue with a high unmet need and a steadily increasing incidence over the past 30 years.12

On November 10, 2015 ImmunoCellular Therapeutics, Ltd. ("ImmunoCellular") (NYSE MKT: IMUC) reported financial results for the third quarter 2015 (Press release, ImmunoCellular Therapeutics, NOV 10, 2015, View Source [SID:1234508193]).

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Andrew Gengos, ImmunoCellular Chief Executive Officer, commented: "With the many milestones we achieved in the third quarter, and throughout this year, we believe that we have changed the trajectory and reshaped the future of ImmunoCellular, and made significant advances toward our goal of becoming a leading cancer immunotherapy company. The highlights of the quarter include reaching agreement with the FDA on the Special Protocol Assessment for the ICT-107 registrational trial in patients with newly diagnosed glioblastoma, and receiving the almost $20 million award from the California Institute for Regenerative Medicine (CIRM) to support the program. We are on the cusp of achieving a major milestone with the start of our Company’s first registrational phase 3 program, anticipated to be initiated this month. We also look forward to presenting updated ICT-107 phase 2 trial results at the Society for Neuro-Oncology (SNO) meeting on November 20th. We remain on track to achieve our goals this year, underscoring our confidence that 2015 is a year of meaningful growth, transition and value creation for our company."

For the quarter ended September 30, 2015, the Company reported a net loss of $3.4 million, or $0.04 per basic and diluted share, compared to a net loss of $1.9 million, or $0.03 per basic and diluted share for the quarter ended September 30, 2014. During the quarter ended September 30, 2015, the Company incurred $2.6 million in research and development expenses compared to $1.5 million in the same quarter of 2014. The increase reflects costs related to the ramp-up of the phase 3 trial of ICT-107, patient enrollment in the ICT-121 phase 1 trial and ramp-up of expenses related to the Company’s Stem-to-T-cell program. These expenses were partially offset by reductions in the ICT-107 phase 2 trial, which continued to wind down, and suspension of the Company’s ICT-140 ovarian cancer program.

For the nine months ended September 30, 2015, the Company reported a net loss of $8.0 million, or $0.09 per basic and diluted share, compared to $7.3 million, or $0.12 per basic and diluted share during the same period in 2014. During the nine months ended September 30, 2015, the Company incurred additional research and development expenses. Also, during the nine months ended September 30, 2015, the Company recorded a gain of $2.3 million related to a reduction in the valuation of its derivative warrants compared to a gain of $400,000 in the same period of 2014.

The Company reported that cash used in operations during the nine months ended September 30, 2015 was $13.2 million compared to $7.8 million during the same period of 2014. The increase in cash used in operations primarily reflects additional research and development expenses and also reflects $4.0 million of vendor deposits related to the ICT-107 Phase 3 trial. These deposits will be offset against future amounts owed to these vendors. Other expenses were consistent between periods. The Company expects that research and development expenses will continue to increase in future periods as it prepares for the phase 3 trial of ICT-107 and as it expands its Stem-to-T-cell program.

On September 18, 2015 the Company received an award in the amount of $19.9 million from CIRM to partially fund the Company’s phase 3 trial of ICT-107. Under the terms of the CIRM award, the Company is obligated to share future ICT-107 related revenue with CIRM. Alternatively, the Company may convert the award to a loan. Since the Company may be required to repay some or all of the amounts awarded by CIRM, the Company plans to account for this award as a liability rather than as revenue.

As of September 30, 2015, the Company had $24.4 million in cash and cash equivalents.

On November 10, 2015 Juno Therapeutics, Inc. (NASDAQ:JUNO), a biopharmaceutical company focused on re-engaging the body’s immune system to revolutionize the treatment of cancer, reported business highlights and financial results for the third quarter of 2015 (Press release, Juno, NOV 10, 2015, View Source;p=RssLanding&cat=news&id=2111192 [SID:1234508194]).

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"We continue to make progress in the clinic and building our capabilities. We began a trial that we expect will support registration of JCAR015 in adult ALL. We started a multi-center Phase I trial for JCAR017 in adult NHL. We completed engineering runs at our manufacturing facility in Bothell. We also continued building out our internal research organization and integrated our two acquisitions," stated Hans Bishop, Juno’s CEO. "Data presented in September suggests that the improved expansion and persistence of JCAR014 lead to clinical benefit. We look forward to presenting more data from our pipeline, in conjunction with our partners, at the upcoming ASH (Free ASH Whitepaper) conference."

Third Quarter 2015 and Recent Corporate Highlights

Clinical Progress:

The U.S. Food and Drug Administration (FDA) cleared Juno’s investigational new drug (IND) application for JCAR015 for the treatment of adult patients with relapsed/refractory (r/r) acute lymphoblastic leukemia (ALL). The Phase 2 study began in the third quarter and will serve as Juno’s U.S. registration trial in adult r/r ALL.

The JCAR017 Phase 1 study in r/r B cell non-Hodgkin lymphoma (NHL) began in the third quarter. The trial is the backbone component of Juno’s multi-pronged strategy in NHL.

The U.S. FDA cleared Juno’s IND application for the MUC-16 & IL-12 "armored" CAR for the treatment of patients with recurrent ovarian cancer.

Corporate News:

Entered into a ten-year collaboration with Celgene to leverage T cell therapeutic strategies with an initial focus on CAR T and TCR therapies. Celgene gained the option to commercialize Juno programs outside North America and co-promote certain programs globally. Celgene also purchased 9.1 million Juno shares. Juno has gained the option to co-develop, co-promote and share profits with respect to select Celgene programs. Juno also received $1.0 billion in total payments, including $150.2 million under the collaboration agreement and $849.8 million in connection with the stock purchase. The collaboration became effective on July 31 after an early termination of the Hart-Scott-Rodino Antitrust waiting period.

Appointed Robert Azelby as Executive Vice President, Chief Commercial Officer. Mr. Azelby is responsible for developing a comprehensive commercial strategy for the company’s product candidates and building the commercial organization.

Third Quarter 2015 Financial Results

Cash Position: Cash, cash equivalents, and marketable securities as of September 30, 2015 were $1.27 billion compared to $313.4 million at June 30, 2015 and $474.1 million as of December 31, 2014. The Company sold 9,137,672 shares of its common stock to Celgene for $93.00 per share resulting in proceeds of $849.8 million and received a cash payment of $150.2 million in connection with the collaboration agreement.

Cash Burn: Excluding the cash inflow of $1.0 billion received in connection with the Celgene stock purchase and collaboration agreement, cash burn in the three months ended September 30, 2015 was $45.7 million. This included cash paid of $14.2 million primarily related to the build out of the company’s manufacturing facility. The additional burn of $31.5 million was primarily due to cash used in operations related to the overall growth of Juno’s business, including the hiring of key talent. Excluding the cash inflow of $1.0 billion in connection with the Celgene stock purchase and collaboration agreement, cash burn in the nine months ended September 30, 2015 was $206.4 million.

Revenue: Revenue was $1.6 million and $14.1 million in the three and nine months ended September 30, 2015, respectively. The third quarter included $1.3 million recognized in connection with the Celgene collaboration agreement.

R&D Expenses: Research and development expenses in the three and nine months ended September 30, 2015, inclusive of non-cash expenses and computed in accordance with GAAP, were $11.5 million and $129.5 million, respectively, compared to $13.0 million and $22.4 million in the three and nine months ended September 30, 2014, respectively. The decrease of $1.5 million in the three months ended September 30, 2015 compared to the same period in 2014 was primarily due to a decline in the estimated value of the potential success payments to the Fred Hutchinson Cancer Research Center (FHCRC) and Memorial Sloan Kettering Cancer Center (MSK), which resulted in a gain of $25.6 million in the three months ended September 30, 2015, almost completely offset by increased R&D activity. The gain related to the success payments recorded in the three months ended September 30, 2015 was largely due to a decrease in the company’s stock price as of September 30, 2015 compared to June 30, 2015. During the three and nine months ended September 30, 2015, respectively, as compared to the same periods in 2014, Juno experienced increased costs related to expanding the company’s overall research and development capabilities, acquiring external technologies, hiring key talent, advancing programs at its founding institutions, and non-cash stock-based compensation expense. The nine months ended September 30, 2015 included an expense related to the company’s success payments of $17.3 million.

Non-GAAP R&D Expenses: Non-GAAP research and development expenses in the three and nine months ended September 30, 2015 were $35.8 million and $76.6 million, respectively. Non-GAAP research and development expenses in 2015 exclude the following:

A gain of $25.6 million and an expense of $17.3 million for the three and nine months ended September 30, 2015, respectively, associated with the change in estimated value and elapsed accrual period for Juno’s potential success payment liabilities to FHCRC and MSK.

Upfront payments related to license agreements of $30.8 million for the nine months ended September 30, 2015 associated with the Editas and Fate Therapeutics collaborations.

Non-cash stock-based compensation expense of $1.3 million and $4.8 million for the three and nine months ended September 30, 2015, respectively, related to a 2013 restricted stock award to a co-founding director that became a consultant upon his departure from Juno’s board of directors in 2014.

Non-GAAP research and development expenses in the three and nine months ended September 30, 2014 were $11.9 million and $21.0 million, respectively, and exclude success payment expense of $1.1 million and $1.5 million, respectively.

G&A Expenses: General and administrative expenses in the three and nine months ended September 30, 2015, inclusive of non-cash expenses and computed in accordance with GAAP, were $13.6 million and $35.2 million, respectively, compared with $5.4 million and $13.4 million in the three and nine months ended September 30, 2014, respectively. The increase of $8.2 million and $21.8 million in the three and nine months ended September 30, 2015, respectively, was primarily due to increased personnel expenses, including non-cash stock-based compensation expense, costs associated with the Stage, X-Body, Celgene, Fate, and Editas transactions, an increase in patent fees and corporate legal fees, and costs associated with being a public company.
GAAP Net Loss Attributable to Common Stockholders: Net loss attributable to common stockholders for the three and nine months ended September 30, 2015 was $23.2 million, or $0.26 per share, and $154.2 million, or $1.80 per share, respectively. This compares to $71.9 million, or $10.50 per share, and $119.0 million, or $17.50 per share, respectively, for the same periods in 2014.

Non-GAAP Net Loss Attributable to Common Stockholders: Non-GAAP net loss attributable to common stockholders, which incorporates the non-GAAP R&D expense, for the three and nine months ended September 30, 2015 was $47.6 million, or $0.53 per share, and $101.2 million, or $1.18 per share, respectively.

For the three and nine months ended September 30, 2014, non-GAAP net loss attributable to common stockholders, which incorporates the non-GAAP R&D expense, was $18.3 million, or $2.68 per share, and $38.5 million, or $5.65 per share, respectively. Non-GAAP net loss attributable to common stockholders for the three and nine months ended September 30, 2014 excludes the following:

Success payment expense of $1.1 million and $1.5 million for the three and nine months ended September 30, 2014, respectively, associated with the change in estimated value and elapsed accrual period for Juno’s potential success payment liabilities to FHCRC and MSK.

Non-cash stock-based compensation expense of $0.4 million and $0.9 million for the three and nine months ended September 30, 2014, respectively, related to a 2013 restricted stock award to a co-founding director that became a consultant upon his departure from Juno’s board of directors in 2014. This expense was classified as general and administrative expense in the three and nine months September 30, 2014 due to the nature of the work performed during this time.

Non-cash convertible preferred stock option expense of $10.7 million in the nine months ended September 30, 2014.

A non-cash charge of $52.1 million and $67.5 million for the three and nine months ended September 30, 2014 related to deemed dividends upon issuance of convertible preferred stock.

A reconciliation of GAAP net loss to non-GAAP net loss is presented below under "Non-GAAP Financial Measures."

2015 Financial Guidance
Juno continues to expect 2015 cash burn, excluding cash inflows or outflows from business development activities and litigation, to be at the higher end of its guidance of between $125 million and $150 million.