On November 6, 2018 Eli Lilly and Company (NYSE: LLY) reported financial results for the third quarter of 2018 (Press release, Eli Lilly, NOV 6, 2018, View Source [SID1234530771]).

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Certain financial information for 2018 and 2017 is presented on both a reported and a non-GAAP basis. Some numbers in this press release may not add due to rounding. Reported results were prepared in accordance with U.S. generally accepted accounting principles (GAAP) and include all revenue and expenses recognized during the periods. Non-GAAP measures exclude the items described in the reconciliation tables later in the release. The company’s 2018 financial guidance is also being provided on both a reported and a non-GAAP basis. The non-GAAP measures are presented to provide additional insights into the underlying trends in the company’s business. This press release does not constitute an offer of any securities for sale.

"Lilly delivered strong financial results in the third quarter. Revenue growth driven by greater use of our newest medicines, coupled with prudent expense management, led to strong EPS growth," said David A. Ricks, Lilly’s chairman and CEO. "Our strategy is to focus on discovering and developing breakthrough medicines that can help doctors and patients who need new treatment options for serious diseases. We are pleased with our progress this quarter, achieving key development and regulatory milestones in pain and diabetes, while driving continued adoption of our new medicines around the world. Consistent with our revised guidance, we expect to finish 2018 by further delivering strong performance."

Key Events Over the Last Three Months

Regulatory

The U.S. Food and Drug Administration (FDA) approved, and the company launched in the U.S., Emgality for the preventive treatment of migraine in adults. In addition, the European Medicines Agency’sCommittee for Medicinal Products for Human Use (CHMP) issued a positive opinion for Emgality for the prophylaxis of migraine in adults who have at least four migraine days per month.
Verzenios was approved in Europe for the treatment of women with hormone receptor (HR) positive, human epidermal growth factor receptor 2 (HER2) negative locally advanced or metastatic breast cancer in combination with an aromatase inhibitor or fulvestrant as initial endocrine-based therapy, or in women who have received prior endocrine therapy. Verzenio was also approved in Japan, where it is indicated for HR+, HER2- unresectable or recurrent breast cancer.
Clinical

The company announced that Trulicity met the primary efficacy objective in the REWIND clinical trial, and significantly reduced major adverse cardiovascular events (MACE), a composite endpoint of cardiovascular (CV) death, non-fatal myocardial infarction (heart attack) or non-fatal stroke.
The company announced that results from a Phase 2b clinical trial of its dual GIP and GLP-1 receptor agonist (GIP/GLP-1 RA, LY3298176) showed strong and clinically meaningful blood sugar reduction and weight loss in people with type 2 diabetes. Phase 3 studies for type 2 diabetes are expected to begin no later than early 2019 and to be completed in late 2021.
The company and Boehringer Ingelheim announced that empagliflozin met the primary efficacy endpoint, defined as a change from baseline in A1C versus placebo after 26 weeks of treatment, for all doses investigated in a Phase III study in adults with type 1 diabetes.
The company announced that readouts from two Phase 3 clinical trials demonstrated that Ultra Rapid Lispro (URLi) met the primary efficacy endpoint of non-inferior A1C reduction from baseline compared to Humalog and also demonstrated significantly improved post-meal glucose control in people with type 1 and type 2 diabetes. Based on these results, the company is planning to submit URLi to regulatory authorities in 2019.
The company and its wholly-owned subsidiary, Avid Radiopharmaceuticals, Inc., announced that a Phase 3 study of flortaucipir F 18, a Positron Emission Tomography (PET) imaging agent, met its two primary endpoints, defined as predicting brain tau pathology and predicting Alzheimer’s disease diagnosis.
Business Development/Other Developments

Elanco Animal Health Incorporated became a publicly traded company via an initial public offering (IPO). As of the closing of the IPO, Lilly owns approximately 80.2 percent of Elanco, and is actively working to divest its remaining position through a tax-efficient transaction within one year of the IPO. Elanco raised over $4 billion in capital from the IPO and associated debt offering.
The company announced a license agreement with Chugai Pharmaceutical Co., Ltd for OWL833, Chugai’s oral non-peptidic GLP-1 receptor agonist. OWL833 is being studied for the treatment of type 2 diabetes. Under the terms of the agreement, Lilly will receive worldwide development and commercialization rights to OWL833. Chugai will receive an upfront payment of $50 million and is eligible for milestone payments based on achievement of certain predetermined milestones. If the molecule is successfully commercialized, Chugai would also be eligible for royalty payments.
The company announced a global licensing and research collaboration with Dicerna Pharmaceuticals focused on the discovery, development and commercialization of potential new medicines in the areas of cardio-metabolic disease, neurodegeneration and pain, utilizing Dicerna’s RNA interference (RNAi) technology platform.
The company acquired a Priority Review Voucher (PRV) from SIGA Technologies for $80 million. The company intends to utilize this voucher to fast track a product application for an existing R&D project, although the specific project has not yet been determined. As a result of this transaction, the company will record an acquired in-process research and development charge of $80 million (pretax), or $0.06 EPS (after tax), in the fourth quarter of 2018.
The company announced a multi-year collaboration with NextCure, Inc. focused on the discovery and development of immuno-oncology cancer therapies. NextCure will apply its discovery platform to identify novel, functional immune-related targets and Lilly will develop antibodies to these targets.
Third-Quarter Reported Results

In the third quarter of 2018, worldwide revenue was $6.062 billion, an increase of 7 percent compared with the third quarter of 2017. The increase in revenue was driven by a 12 percent increase due to volume, partially offset by a 4 percent decrease due to lower realized prices and a 1 percent decrease due to the unfavorable impact of foreign exchange rates.

Revenue in the U.S. increased 11 percent, to $3.447 billion, driven primarily by increased volume for new pharmaceutical products, including Trulicity, Basaglar, Taltz, and Verzenio. The increase in revenue was partially offset by lower realized prices, primarily driven by Basaglar, Humalog and Taltz, as well as decreased volume for products that have lost exclusivity, including Cialis, Stratteraand Effient.

Revenue outside the U.S. increased 2 percent, to $2.615 billion, driven by increased volume of 8 percent, which was primarily for new pharmaceutical products, including Trulicity, Olumiant and Taltz. The increase in revenue was partially offset by lower realized prices for several pharmaceutical products, decreased volume for Cialis due to loss of exclusivity, as well as the unfavorable impact of foreign exchange rates.

Gross margin increased 11 percent, to $4.500 billion, in the third quarter of 2018 compared with the third quarter of 2017. Gross margin as a percent of revenue was 74.2 percent, an increase of 2.2 percentage points compared with the third quarter of 2017. The increase in gross margin percent was primarily due to manufacturing efficiencies and, to a lesser extent, the effect of foreign exchange rates on international inventories sold and the favorable impact of product mix, partially offset by the negative impact of price on revenue.

Operating expenses in the third quarter of 2018, defined as the sum of research and development and marketing, selling, and administrative expenses, increased 1 percent to $2.960 billion. Research and development expenses remained flat at $1.343 billion, or 22.2 percent of revenue, as additional late-stage development expenditures were offset by lower development milestone payments compared to the third quarter of 2017. Marketing, selling, and administrative expenses increased 2 percent, to $1.617 billion, primarily due to increased expenses related to new pharmaceutical product launches, partially offset by reduced expenses on late life-cycle products. Both research and development expenses and marketing, selling, and administrative expenses benefited from previously-announced actions taken to reduce the company’s cost structure.

In the third quarter of 2018, the company recognized acquired in-process research and development charges of $30.0 million related to a collaboration with Anima Biotech for the discovery and development of translation inhibitors for several target proteins. In the third quarter of 2017, the company recognized acquired in-process research and development charges of $205.0 million associated with strategic collaborations with Nektar Therapeutics to co-develop NKTR-358 and with KeyBioscience focused on the development of Dual Amylin Calcitonin Receptor Agonists (DACRAs).

In the third quarter of 2018, the company recognized asset impairment, restructuring, and other special charges of $83.3 million. The charges are primarily associated with asset impairment and restructuring charges related to the sale of the Posilac (rbST) brand and the October 2, 2018 sale of the Augusta, Georgia manufacturing site. The charges also include expenses associated with the initial public offering and separation of the Elanco animal health business. In the third quarter of 2017, the company recognized asset impairment, restructuring and other special charges of $406.5 million. These charges were partially associated with asset impairments related to lower projected revenue for Posilac. The charges were also associated with severance costs incurred as a result of actions taken to reduce the company’s cost structure.

Operating income in the third quarter of 2018 was $1.426 billion, compared to $541.7 million in the third quarter of 2017. The increase to operating income was driven by higher gross margin, lower asset impairment, restructuring, and other special charges, and, to a lesser extent, lower acquired in-process research and development charges.

Other income (expense) was expense of $15.4 million in the third quarter of 2018, compared with income of $49.9 million in the third quarter of 2017. The reduction in other income (expense) was driven by foreign exchange losses (primarily related to Argentina), higher net interest expense and mark-to-market adjustments on investment securities.

The effective tax rate was 18.5 percent in the third quarter of 2018, compared with 6.1 percent in the third quarter of 2017. The higher effective tax rate for the third quarter of 2018 is primarily due to a higher income tax benefit in the third quarter of 2017 for acquired in-process research and development charges, asset impairment, restructuring, and other special charges.

In the third quarter of 2018, net income and earnings per share were $1.149 billion and $1.12, respectively, compared with net income of $555.6 million and earnings per share of $0.53 in the third quarter of 2017. The increases in net income and earnings per share were primarily driven by higher operating income, partially offset by higher tax expense.

Third-Quarter Non-GAAP Measures

On a non-GAAP basis, third-quarter 2018 gross margin increased 10 percent, to $4.651 billion. Gross margin as a percent of revenue was 76.7 percent, an increase of 1.9 percentage points compared with the third quarter of 2017. The increase in gross margin percent was primarily due to manufacturing efficiencies and, to a lesser extent, the effect of foreign exchange rates on international inventories sold and the favorable impact of product mix, partially offset by the negative impact of price on revenue.

Reflecting the company’s previously-announced actions to reduce its cost structure, operating expenses were 48.8 percent of revenue in the third quarter of 2018, a reduction of 2.7 percentage points compared with the third quarter of 2017.

Operating income increased $377.5 million, or 29 percent, to $1.692 billion in the third quarter of 2018, primarily due to higher revenue.

The effective tax rate was 15.1 percent in the third quarter of 2018, compared with 18.9 percent in the third quarter of 2017. The lower effective tax rate for the third quarter of 2018 was primarily due to U.S. tax reform enacted in December 2017.

In the third quarter of 2018, net income increased 29 percent, to $1.424 billion, and earnings per share increased 32 percent, to $1.39, compared with $1.107 billion and $1.05, respectively, in the third quarter of 2017. The increases in net income and earnings per share were primarily driven by higher operating income.

For further detail of non-GAAP measures, see the reconciliation below as well as the Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information table later in this press release.

Third Quarter

2018

2017

% Change

Earnings per share (reported)

$

1.12

$

0.53

NM

Amortization of intangible assets

.12

.10

Asset impairment, restructuring and other special charges

.07

.29

Income taxes(a)

.05

—

Acquired in-process research and development

.02

.13

Earnings per share (non-GAAP)

$

1.39

$

1.05

32%

Numbers may not add due to rounding.

(a) Relates to adjustments to the 2017 Toll Tax for U.S. tax reform proposed regulations and tax expenses associated with the separation of the Elanco animal health business.

Year-to-Date Results

For the first nine months of 2018, worldwide revenue increased 8 percent, to $18.117 billion, compared with $16.711 billion in the same period in 2017. Reported net income and earnings per share were $2.107 billion and $2.03, respectively, for the first nine months of 2018.

Year-to-Date Non-GAAP Measures

For the first nine months of 2018, net income and earnings per share, on a non-GAAP basis, were $4.377 billion and $4.22, respectively.

For further detail of non-GAAP measures, see the reconciliation below as well as the Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information table later in this press release.

Year-to-Date

2018

2017

% Change

Earnings per share (reported)

$

2.03

$

1.37

48%

Acquired in-process research and development

1.57

.94

Amortization of intangible assets

.36

.33

Asset impairment, restructuring and other special charges

.20

.48

Income taxes(a)

.05

—

Other, net

.01

.02

Earnings per share (non-GAAP)

$

4.22

$

3.14

34%

Numbers may not add due to rounding.

(a) Relates to adjustments to the 2017 Toll Tax for U.S. tax reform proposed regulations and tax expenses associated with the separation of the Elanco animal health business.

Selected Revenue Highlights

(Dollars in millions)

Third Quarter

Year-to-Date

Established Pharma
Products

2018

2017

% Change

2018

2017

% Change

Humalog

$

664.6

$

696.2

(5)%

$

2,226.1

$

2,083.0

7%

Alimta

520.5

514.5

1%

1,576.0

1,537.3

3%

Cialis

467.1

564.9

(17)%

1,501.2

1,725.7

(13)%

Forteo

390.8

441.7

(12)%

1,138.5

1,235.8

(8)%

Humulin

322.1

300.5

7%

994.0

972.8

2%

Cymbalta

172.0

(a) Trajenta includes Jentadueto

(b) Jardiance includes Glyxambi and Synjardy

NM – not meaningful

Numbers may not add due to rounding

Selected Established Pharma Products

Humalog

For the third quarter of 2018, worldwide Humalog revenue decreased 5 percent compared with the third quarter of 2017, to $664.6 million. Revenue in the U.S. decreased 12 percent, to $365.6 million, driven by lower realized prices primarily due to changes in segment mix and the impact of patient affordability programs, partially offset by increased volume. Revenue outside the U.S. increased 6 percent, to $299.0 million, driven by increased volume, partially offset by lower realized prices and the unfavorable impact of foreign exchange rates.

Alimta

For the third quarter of 2018, Alimta generated worldwide revenue of $520.5 million, which increased 1 percent compared with the third quarter of 2017. U.S. revenue increased 11 percent, to$288.5 million, driven by increased demand and, to a lesser extent, higher realized prices. Revenue outside the U.S. decreased 9 percent to $232.0 million, driven primarily by decreased volume due to competitive pressure and loss of exclusivity in several countries.

Cialis

For the third quarter of 2018, worldwide Cialis revenue decreased 17 percent to $467.1 million. U.S. revenue was $295.9 million in the third quarter, a 7 percent decrease compared with the third quarter of 2017, driven by decreased demand due to the entry of generic sildenafil, partially offset by higher realized prices. Cialis lost exclusivity, and generic tadalafil entered the U.S. market, in late September 2018. Revenue outside the U.S. decreased 30 percent to $171.2 million, primarily driven by the loss of exclusivity in Europe.

Forteo

For the third quarter of 2018, worldwide revenue for Forteo was $390.8 million, a 12 percent decrease compared with the third quarter of 2017. U.S. revenue decreased 22 percent, to $182.5 million, primarily due to decreased demand and, to a lesser extent, lower realized prices. Revenue outside the U.S. remained flat at $208.3 million, driven by increased volume, offset by lower realized prices and the unfavorable impact of foreign exchange rates.

Humulin

For the third quarter of 2018, worldwide Humulin revenue increased 7 percent compared with the third quarter of 2017, to $322.1 million. U.S. revenue increased 7 percent, to $216.9 million, driven by increased volume. Revenue outside the U.S. increased 8 percent, to $105.1 million, primarily due to buying patterns in China, partially offset by the unfavorable impact of foreign exchange rates.

Select Products Launched Since 2014

Trulicity

Third-quarter 2018 worldwide Trulicity revenue was $816.2 million, an increase of 55 percent compared with the third quarter of 2017. U.S. revenue increased 56 percent, to $645.9 million, driven by higher demand. Revenue outside the U.S. was $170.3 million, an increase of 48 percent, primarily driven by increased volume.

Taltz

For the third quarter of 2018, worldwide Taltz revenue was $263.9 million, an increase of 74 percent compared with the third quarter of 2017. U.S. revenue was $210.6 million, an increase of 60 percent, driven by higher demand, partially offset by lower realized prices. Revenue outside the U.S. was $53.3 million, an increase of $33.3 million, driven by increased volume from new launches.

Cyramza

For the third quarter of 2018, worldwide Cyramza revenue was $198.4 million, an increase of 1 percent compared with the third quarter of 2017. U.S. revenue was $67.0 million, a decrease of 4 percent, driven by lower realized prices. Revenue outside the U.S. was $131.4 million, an increase of 4 percent, driven by increased volume, partially offset by lower realized prices.

Basaglar

For the third quarter of 2018, Basaglar generated worldwide revenue of $201.2 million, an increase of 38 percent compared with the third quarter of 2017. U.S. revenue was $157.3 million, an increase of 37 percent, driven by increased demand, partially offset by lower realized prices due to increased volume in Medicare Part D and, to a lesser extent, changes to estimates for rebates and discounts. Revenue outside the U.S. was $43.9 million, an increase of 44 percent, primarily driven by increased demand. Basaglar is part of the company’s alliance with Boehringer Ingelheim, and Lilly reports total sales as revenue, with payments made to Boehringer Ingelheim for its portion of the gross margin reported as cost of sales.

Jardiance

The company’s worldwide Jardiance revenue during the third quarter of 2018 was $166.9 million, an increase of 31 percent compared with the third quarter of 2017. U.S. revenue increased 24 percent, to $104.2 million, driven by increased demand. Revenue outside the U.S. was $62.7 million, an increase of 45 percent, primarily driven by increased volume. Jardiance is part of the company’s alliance with Boehringer Ingelheim, and Lilly reports as revenue a portion of Jardiance’s gross margin.

Lartruvo

For the third quarter of 2018, Lartruvo generated worldwide revenue of $76.9 million, an increase of 41 percent compared with third quarter of 2017. U.S. revenue increased 12 percent, to $47.4 million, driven by increased demand. Revenue outside the U.S. was $29.5 million, an increase of $17.5 million, driven by increased volume from new launches.

Verzenio

For the third quarter of 2018, Verzenio, a treatment for women with HR+, HER2- advanced breast cancer, generated U.S. revenue of $84.5 million, an increase of $26.7 million compared with the second quarter of 2018.

Olumiant

For the third quarter of 2018, Olumiant generated worldwide revenue of $55.6 million. U.S. revenue was $0.8 million. Revenue outside the U.S. was $54.8 million, an increase of $11.9 million compared with the second quarter of 2018, reflecting uptake of new launches in Europe.

Animal Health

In the third quarter of 2018, worldwide animal health revenue totaled $772.7 million, an increase of 4 percent compared with the third quarter of 2017, driven by higher prices and higher volume, partially offset by the negative impact of foreign exchange rates. In terms of animal health product categories, higher sales of companion animal disease prevention, ruminants and swine, and companion animal therapeutics products were partially offset by lower sales of products that are being exited. For specific animal health product performance, refer to today’s Elanco Animal Health Incorporated press release.

2018 Financial Guidance

The company has revised certain elements of its 2018 financial guidance on a reported basis and on a non-GAAP basis. On a reported basis, earnings per share for 2018 are now expected to be in the range of $3.04 to $3.09. On a non-GAAP basis, earnings per share are now expected to be in the range of $5.55 to $5.60.

(a) Relates to adjustments to the 2017 Toll Tax for U.S. tax reform proposed regulations and tax expenses associated with the separation of the Elanco animal health business.

The company now anticipates 2018 revenue between $24.3 billion and $24.5 billion. The increase in the low end of the revenue range from prior guidance is due to strong performance across the pharmaceutical portfolio, particularly in diabetes. Revenue growth is still expected to be driven by new products including Trulicity, Taltz, Basaglar, Jardiance, Verzenio, Cyramza, Olumiant and Lartruvo.

Marketing, selling and administrative expenses are now expected to be in the range of $6.3 billion to $6.5 billion.

The 2018 effective tax rate is still expected to be approximately 22.5 percent on a reported basis and is now expected to be approximately 16 percent on a non-GAAP basis, reflecting recently issued guidance on elements of U.S. tax reform. The 2018 effective tax rate benefits from a lower corporate income tax rate, partially offset by the changes to certain business exclusions, deductions, credits and international tax provisions. The 2018 effective tax rate is subject to change based upon changes in the company’s interpretations of the tax laws, along with subsequent regulations, interpretations, guidance, and accounting policy elections that the company continues to evaluate.

Webcast of Conference Call

As previously announced, investors and the general public can access a live webcast of the third-quarter 2018 financial results conference call through a link on Lilly’s website at www.lilly.com. The conference call will be held today from 9 a.m. to 10:30 a.m. Eastern time (ET) and will be available for replay via the website.

Lilly is a global healthcare leader that unites caring with discovery to create medicines that make life better for people around the world. We were founded more than a century ago by a man committed to creating high-quality medicines that meet real needs, and today we remain true to that mission in all our work. Across the globe, Lilly employees work to discover and bring life-changing medicines to those who need them, improve the understanding and management of disease, and give back to communities through philanthropy and volunteerism. To learn more about Lilly, please visit us at www.lilly.com and View Source F-LLY

On November 6, 2018 Seattle Genetics, Inc. (NASDAQ:SGEN) reported that management will present at the Credit Suisse 27th Annual Healthcare Conference on Tuesday, November 13, 2018 at 2:15 p.m. Mountain Time (Press release, Seattle Genetics, NOV 6, 2018, View Source [SID1234530793]). The presentation will be webcast live and available for replay from Seattle Genetics’ website at www.seattlegenetics.com in the Investors section.

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On November 6, 2018 EyePoint Pharmaceuticals, Inc. (NASDAQ: EYPT), a specialty biopharmaceutical company committed to developing and commercializing innovative ophthalmic products, reported operating and financial results for its fiscal 2019 first quarter ended September 30, 2018 and highlighted recent clinical and operational developments (Press release, pSivida, NOV 6, 2018, View Source [SID1234530856]).

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"The approval of YUTIQ by the U.S. FDA in October marked a significant achievement for EyePoint and validates the Company’s innovation and ability to develop an effective treatment to decrease recurrence of uveitic flares from non-infectious posterior segment uveitis that can result in blindness," said Nancy Lurker, President and Chief Executive Officer of EyePoint Pharmaceuticals. "Following the positive reception by retina and uveitis specialists of the clinical data presented for YUTIQ at the American Academy of Ophthalmology 2018 Annual Meeting, we believe that we are well-positioned for a successful product launch planned in the first quarter of calendar 2019. In addition, we are scaling up our manufacturing of DEXYCU ahead of an anticipated launch in the first half of calendar 2019."

Recent Clinical & Operational Highlights

In October 2018, the U.S. Food and Drug Administration (FDA) approved YUTIQ (fluocinolone acetonide intravitreal implant) 0.18 mg, a three-year micro-insert for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye. YUTIQ utilizes the Company’s Durasert drug delivery technology and is an intravitreal micro-insert designed to deliver drug consistently over 36 months. The approval occurred 24 days in advance of the PDUFA date of November 5th.

At the American Academy of Ophthalmology (AAO) 2018 Annual Meeting in Chicago, IL, 24-month efficacy and safety data supporting YUTIQ was presented during the Retina Subspecialty day at a breakthrough presentation entitled, "24-month Evaluation of Fluocinolone Acetonide Intravitreal Insert Treatment for Non-Infectious Posterior Uveitis". These data demonstrated that the recurrence rate in randomized eyes treated with YUTIQ was significantly lower than in sham eyes (59.8% vs. 97.6%, respectively; p<0.001) at 24-months of the three-year trial. Safety and side effects were consistent with those reported for previous analyses of earlier timepoints.

In August, safety and efficacy data from the Phase 3 clinical trial of DEXYCU compared to prednisolone acetate 1.0% ophthalmic drops for the treatment of inflammation post-cataract surgery were published in the Journal of Cataract & Refractive Surgery. Results demonstrated similar efficacy and safety between both products in treating inflammation post cataract surgery with a preference of DEXYCU compared to drops.

EyePoint granted Ocumension Therapeutics, a China-based ophthalmology company, an exclusive license to develop and commercialize EyePoint’s three-year micro insert product using the Durasert technology for chronic, non-infectious uveitis affecting the posterior segment of the eye in the greater China territory, which is comprised of China, Hong Kong, Macau and Taiwan. EyePoint will receive a one-time upfront payment of $1.75 million and is eligible to receive up to an additional $10.0 million if certain future prespecified development, regulatory and commercial sales milestones are achieved by Ocumension. Ocumension will be responsible for funding the clinical development of EyePoint’s three-year micro-insert product using the Durasert technology for chronic, non-infectious posterior segment uveitis in Greater China. EyePoint will supply product for the clinical trials.

John Landis, Ph.D., M.S., was appointed to the EyePoint Board of Directors in October 2018. Dr. Landis brings more than 30 years of pharmaceutical research and development experience from senior level roles held at Schering-Plough Corporation, Pharmacia Corporation and The Upjohn Company.

EyePoint’s Board of Directors approved a change of the Company’s fiscal year-end to December 31 from the current fiscal year-end of June 30. The Company believes this change will align its financial reporting periods to that of its peer group in the industry and better facilitate assessment of the Company’s financial performance. The Company will file transitional audited financial statements on Form 10-KT for the six-month period ending December 31, 2018.

Fiscal First Quarter 2019 Results

Revenue for the three months ended September 30, 2018 totaled $486,000 compared to $385,000 for the prior year quarter. Revenues in both periods were primarily derived from royalty income under existing collaboration agreements.

Operating expenses for the quarter ended September 30, 2018 increased to $14.0 million from $6.4 million a year earlier, due primarily to initial investments in sales and marketing infrastructure and program costs, amortization of the DEXYCU intangible asset, professional services and stock-based compensation. Non-operating expense, net in the quarter ended September 30, 2018 totaled $19.6 million and consisted primarily of a non-cash change in fair value of derivative liability and interest expense on our term loan. Net loss for the quarter ended September 30, 2018 was $33.1 million, or $0.44 per share, compared to a net loss of $6.0 million, or $0.15 per share, for the prior year quarter.

Cash and cash equivalents at September 30, 2018 totaled $55.8 million compared to $38.8 million at June 30, 2018. The cash balance of September 30, 2018 reflects proceeds of $28.9 million from the exercise of warrants in the quarter.

Conference Call Information

EyePoint will host a conference call today, Tuesday, November 6, 2018, at 8:00 AM ET, to discuss the fiscal first quarter 2019 financial results and recent clinical and operational developments. To access the conference call, please dial (877) 312-7507 (local) or (631) 813-4828 (international) at least 10 minutes prior to the start time and refer to conference ID 3098959. A live webcast will be available on the Investor Relations section of the corporate website at View Source A replay of the webcast will also be available on the corporate website.

On November 6, 2018 MEI Pharma, Inc. (Nasdaq: MEIP), a late-stage pharmaceutical company focused on advancing new therapies for cancer, reported that Daniel P. Gold, Ph.D., the Company’s president and chief executive officer, will present a corporate update at the Stifel 2018 Healthcare Conference on November 13, 2018 at 9:30 a.m. ET. The conference will take place November 13-14, in New York, N.Y (Press release, MEI Pharma, NOV 6, 2018, View Source [SID1234530873]).

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A live audio webcast of the event can be accessed on the Events & Presentations page of the Investors section of MEI Pharma’s website at View Source

An archived replay of the webcast will be available on MEI Pharma’s website for at least 30 days after the live event concludes.

On November 6, 2018 Rigel Pharmaceuticals, Inc. (Nasdaq:RIGL), reported financial results for the third quarter ended September 30, 2018, and also provided an update on the commercial launch of TAVALISSE for treatment of thrombocytopenia in adults with chronic immune thrombocytopenia (ITP) who have had an insufficient response to a previous treatment and its clinical development pipeline (Press release, Rigel, NOV 6, 2018, View Source [SID1234530861]).

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Recent Highlights

·Net product sales of $4.9 million for TAVALISSE during the third quarter

·On October 29, entered into an exclusive license and supply agreement with Kissei Pharmaceutical Co., Ltd. (Kissei) for development and marketing rights to fostamatinib in Asia; Rigel to receive upfront cash payment of $33 million, with the potential for up to an additional $147 million in milestone payments and product transfer price payments based on tiered net sales

· On October 4, the European Medicines Agency (EMA) validated the company’s Marketing Authorization Application (MAA) for fostamatinib1 in adult chronic ITP, initiating the review process

· Phase 3 trial design for fostamatinib1 investigational candidate in autoimmune hemolytic anemia (AIHA) to be submitted to U.S. Food and Drug Administration (FDA) in early November

"We continue to advance our corporate strategy with solid execution across all business areas. The success of our TAVALISSE commercial launch in the United States, our collaboration with Kissei in Asia, and our MAA validation highlight the expanding capabilities of our organization," said Raul Rodriguez, president and CEO of Rigel. "In parallel, our clinical development plans continue to increase the potential of our pipeline. For our investigational agents, we plan to initiate our Phase 3 study for fostamatinib in autoimmune hemolytic anemia in the first half of 2019 and we continue to explore potential drug development opportunities including for our IRAK1/4 inhibitor, R835."

Financial Update

For the third quarter of 2018, Rigel reported a net loss of $23.8 million, or $0.14 per share, compared to a net loss of $17.7 million, or $0.14 per share, in the same period of 2017.

For the third quarter of 2018, Rigel reported net product sales from TAVALISSE of $4.9 million. Rigel recognizes revenue using the sell-in methodology when products are delivered to its distributors. There were no product sales in the third quarter of 2017.

There were no contract revenues from collaborations in the third quarter of 2018. Contract revenues from collaborations of $900,000 in the third quarter of 2017 were related to a payment received from a license agreement with a third party.

Rigel reported total costs and expenses of $29.2 million in the third quarter of 2018, compared to $18.8 million for the same period in 2017. The increase in costs and expenses was primarily due to the increases in personnel costs as Rigel expanded its customer-facing team, third party costs to support Rigel’s ongoing commercial efforts for TAVALISSE in chronic ITP, as well as stock-based compensation expense related to certain performance-based stock options.

For the nine months ended September 30, 2018, Rigel reported net product sales from TAVALISSE of $6.7 million. There were no product sales for the nine months ended September 30, 2017. For the nine months ended September 30, 2018, Rigel reported a net loss of $73.7 million, or $0.47 per share, compared to a net loss of $52.1 million, or $0.43 per share, for the same period of 2017.

As of September 30, 2018, Rigel had cash, cash equivalents and short-term investments of $115.6 million, compared to $115.8 million as of December 31, 2017. With the $33.0 million upfront payment Rigel will receive under its collaboration agreement with Kissei, as discussed below, Rigel expects that its cash, cash equivalents and short-term investments will be sufficient to support its current and projected funding requirements, including the on-going commercial launch of TAVALISSE for chronic ITP in the U.S., into the first quarter of 2020.

Business Update

Since commercial launch in May 2018, demand for TAVALISSE in adult patients with previous treatment failure in cITP continues to grow, with broad usage seen in steroid refractory patients. TAVALISSE has been utilized by a broad base of prescribers and community physicians, and the payor response has been positive with an approval rate of 85-90%.

Outside of the U.S., the company continues to further its global commercialization strategy. Rigel has entered an exclusive license and supply agreement with Kissei for the development and commercialization of fostamatinib in all indications in Japan. The agreement also provides Kissei with rights to fostamatinib in China, Taiwan, and the Republic of Korea. In exchange, Rigel will receive an upfront cash payment of $33 million with the potential for up to an additional $147 million in development and commercial milestone payments. The company will also receive product transfer price payments in the mid to upper twenty percent range based on tiered net sales for exclusive supply of fostamatinib.

In the EU, which is the second largest market for adult chronic ITP, the EMA validated the MAA for fostamatinib1 in the indication. The review process was initiated in October and the company anticipates an opinion from the Committee on Human Medicinal Products (CHMP) of the EMA by the fourth quarter of 2019.

Rigel continues to progress with its expansion plans for fostamatinib in other indications1 and will submit its Phase 3 trial design for the treatment of warm AIHA (wAIHA) to the FDA in early November. The trial, designed in consultation with the FDA, is a placebo-controlled study of approximately 80 patients with primary or secondary wAIHA who have failed at least one prior treatment. The primary endpoint will be a durable hemoglobin response by week 24, defined as Hgb > 10 g/dL and > 2 g/dL

greater than baseline and durability of response, with the response not being attributed to rescue therapy. Enrollment is expected to begin in the first half of 2019.

About ITP
In patients with ITP, the immune system attacks and destroys the body’s own blood platelets, which play an active role in blood clotting and healing. Common symptoms of ITP are excessive bruising and bleeding. People suffering with chronic ITP may live with an increased risk of severe bleeding events that can result in serious medical complications or even death. Current therapies for ITP include steroids, blood platelet production boosters (TPOs) and splenectomy. However, not all patients are adequately treated with existing therapies. As a result, there remains a significant medical need for additional treatment options for patients with ITP.

About AIHA
AIHA is a rare, serious blood disorder in which the immune system produces antibodies that result in the destruction of the body’s own red blood cells. AIHA affects approximately 40,000 adult patients in the U.S. and can be a severe, debilitating disease. To date, there are no disease-targeted therapies approved for AIHA, despite the unmet medical need that exists for these patients.

About R8351

The investigational candidate, R835, is an orally available, potent and selective inhibitor of IRAK1 and IRAK4 that has been shown preclinically to block inflammatory cytokine production in response to toll-like receptor (TLR) and the interleukin-1 (IL-1R) family receptor signaling. TLRs and IL-1Rs play a critical role in the innate immune response and dysregulation of these pathways can lead to a variety of inflammatory conditions. R835 is active in multiple rodent models of inflammatory disease including psoriasis, arthritis, lupus, multiple sclerosis and gout.

Conference Call and Webcast with Slides Today at 5:00PM Eastern Time
Rigel will hold a live conference call and webcast today at 5:00pm Eastern Time (2:00pm Pacific Time).

Participants can access the live conference call by dialing 855-892-1489 (domestic) or 720-634-2939 (international) and using the Conference ID number 1398326. The webcast, with slide presentation, can be accessed from Rigel’s website at www.rigel.com. The webcast will be archived and available for replay after the call via the Rigel website.

About TAVALISSE
Indication
TAVALISSE (fostamatinib disodium hexahydrate) tablets is indicated for the treatment of thrombocytopenia in adult patients with chronic immune thrombocytopenia (ITP) who have had an insufficient response to a previous treatment.

Important Safety Information
Warnings and Precautions

· Hypertension can occur with TAVALISSE treatment. Patients with pre-existing hypertension may be more susceptible to the hypertensive effects. Monitor blood pressure every 2 weeks until stable, then monthly, and adjust or initiate antihypertensive therapy for blood pressure control maintenance during therapy. If increased blood pressure persists, TAVALISSE interruption, reduction, or discontinuation may be required.

· Elevated liver function tests (LFTs), mainly ALT and AST, can occur with TAVALISSE. Monitor LFTs monthly during treatment. If ALT or AST increase to >3 x upper limit of normal, manage hepatotoxicity using TAVALISSE interruption, reduction, or discontinuation.

· Diarrhea occurred in 31% of patients and severe diarrhea occurred in 1% of patients treated with TAVALISSE. Monitor patients for the development of diarrhea and manage using supportive care measures early after the onset of symptoms. If diarrhea becomes severe (>Grade 3), interrupt, reduce dose or discontinue TAVALISSE.

· Neutropenia occurred in 6% of patients treated with TAVALISSE; febrile neutropenia occurred in 1% of patients. Monitor the ANC monthly and for infection during treatment. Manage toxicity with TAVALISSE interruption, reduction, or discontinuation.

· TAVALISSE can cause fetal harm when administered to pregnant women. Advise pregnant women the potential risk to a fetus. Advise females of reproductive potential to use effective contraception during treatment and for at least 1 month after the last dose. Verify pregnancy status prior to initiating TAVALISSE. It is unknown if TAVALISSE or its metabolite is present in human milk. Because of the potential for serious adverse reactions in a breastfed child, advise a lactating woman not to breastfeed during TAVALISSE treatment and for at least 1 month after the last dose.

Drug Interactions

· Concomitant use of TAVALISSE with strong CYP3A4 inhibitors increases exposure to the major active metabolite of TAVALISSE (R406), which may increase the risk of adverse reactions. Monitor for toxicities that may require a reduction in TAVALISSE dose.

· It is not recommended to use TAVALISSE with strong CYP3A4 inducers, as concomitant use reduces exposure to R406.

· Concomitant use of TAVALISSE may increase concentrations of some CYP3A4 substrate drugs and may require a dose reduction of the CYP3A4 substrate drug.

· Concomitant use of TAVALISSE may increase concentrations of BCRP substrate drugs (eg, rosuvastatin) and P-Glycoprotein (P-gp) substrate drugs (eg, digoxin), which may require a dose reduction of the BCRP and P-gp substrate drug.

Adverse Reactions

· Serious adverse drug reactions in the ITP double-blind studies were febrile neutropenia, diarrhea, pneumonia, and hypertensive crisis, which occurred in 1% of TAVALISSE patients. In addition, severe adverse reactions occurred including dyspnea and hypertension (both 2%), neutropenia, arthralgia, chest pain, diarrhea, dizziness, nephrolithiasis, pain in extremity, toothache, syncope, and hypoxia (all 1%).

· Common adverse reactions (>5% and more common than placebo) from FIT-1 and FIT-2 included: diarrhea, hypertension, nausea, dizziness, ALT and AST increased, respiratory infection, rash, abdominal pain, fatigue, chest pain, and neutropenia.

Please see www.TAVALISSE.com for full Prescribing Information.
t side effects of prescription drugs to the FDA, visit www.fda.gov/medwatch or call 1-800-FDA-1088 (800-332-1088).

TAVALISSE and RIGEL ONECARE are trademarks of Rigel Pharmaceuticals, Inc.