Aradigm has filed a 10-K – Annual report [Section 13 and 15(d), not S-K Item 405] with the U.S. Securities and Exchange Commission (Filing, 10-K, Aradigm, 2018, MAR 23, 2018, View Source [SID1234524962]).

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On March 23, 2018 Aradigm Corporation (NASDAQ: ARDM) (the "Company") reported financial results for the fourth quarter and full year ended December 31, 2017 (Press release, Aradigm, MAR 23, 2018, View Source [SID1234524961]).

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Fourth Quarter 2017 Results

The Company recorded $2.4 million in revenue in the fourth quarter of 2017 compared with $125,000 in revenue in the fourth quarter of 2016. The Company recognized $2.3 million in contract revenue – related party, $27,000 in government contract revenue and $71,000 in government grant revenue for the fourth quarter of 2017, as compared to $116,000 in government contract revenue and $9,000 in government grant revenue for the fourth quarter of 2016. The increase in revenue was from the Company’s adoption of ASC Topic 606, Revenue from Contracts with Customers and primarily resulted from regulatory submission services provided for the New Drug Application (NDA) filing.

Total operating expenses for the fourth quarter of 2017 were $5.6 million, compared with total operating expenses of $7.2 million for the fourth quarter of 2016. The decrease in operating expenses was primarily due to lower research and development expenses because the Linhaliq Phase 3 clinical trials in non-cystic fibrosis bronchiectasis (NCFBE) are complete. This decrease was offset by higher consulting expenses in support of the regulatory approval process and higher costs in general and administrative expenses related to stock compensation expense, bonus expense and corporate insurance expense.

The Company’s net loss for the fourth quarter of 2017 was $4.2 million, or $0.28 per share, compared with a net loss of $7.9 million, or $0.54 per share, for the same period in 2016. For the quarter ended December 31, 2017, the decrease in net loss resulted primarily from an increase in revenue of $2.2 million and a decrease in operating expenses of $1.6 million, partially offset by an increase in interest expense of $0.1 million.

Full Year Results

Revenues for the year ended December 31, 2017 were $14.5 million, compared with revenues of $195,000 thousand in 2016. The Company recognized $14.1 million in contract revenue – related party, $268,000 in government contract revenue and $122,000 in government grant revenue for the year ended December 31, 2017, as compared to $40,000 in contract revenue – related party, $116,000 in government contract revenue and $39,000 in government grant revenue for the year ended December 31, 2016. The increase in revenue was primarily from the Company’s adoption of ASC Topic 606, Revenue from Contracts with Customers, which resulted in the recognition of $9.5 million in contract revenue – related party associated with regulatory submission and approval of services provided for the NDA filing combined with $4.5 million in contract revenue – related party from a change in estimated variable consideration associated with the $5 million regulatory milestone for the NDA filing allocated to performance obligations satisfied in the current or prior periods.

Total operating expenses for 2017 were $21.4 million, compared with total operating expenses of $30.2 million in 2016. Research and development expenses decreased by $10.6 million and general and administrative expenses increased by $1.8 million. The decrease in research and development expenses was due to lower contract manufacturing, contract testing and clinical trial costs because the Linhaliq Phase 3 clinical trials in non-cystic fibrosis bronchiectasis (NCFBE) are complete. The decrease was offset by higher employee-related expenses, higher consulting, meeting and travel expenses in support of the Linhaliq regulatory process towards U.S. and European Union approvals for market authorization. The increase in general and administrative expenses of $1.8 million was primarily related to higher performance bonus expense, higher legal expense, higher corporate insurance expense, higher non-cash stock compensation expense and higher consulting expense.

The net loss for the year ended December 31, 2017 was $10.7 million, or $0.72 per share, compared with a net loss of $32.9 million, or $2.23 per share, in 2016. Net loss decreased primarily from an increase in revenue of $14.3 million, a decrease in operating spend of $8.8 million related to the completion of the Phase 3 clinical trials for Linhaliq in non-CF BE in the fourth quarter of 2016, a decrease in other expense of $0.6 million in 2017, offset by an increase in interest expense of $1.5 million related to the Note Financing.

Liquidity and Capital Resources and Related Matters

As of December 31, 2017, the Company’s cash and cash equivalents totaled $7.1 million.

Aradigm received a Complete Response Letter (CRL) from the FDA regarding the New Drug Application (NDA) for Linhaliq as a treatment for non-cystic fibrosis bronchiectasis (NCFBE) patients with chronic lung infections with Pseudomonas aeruginosa (P. aeruginosa).

The CRL states that the FDA has determined that it cannot approve the NDA in its present form and provides specific reasons for this action along with recommendations needed for resubmission; the areas of concern include clinical data, human factor validation study and product quality.

The Aradigm Board of Directors approved temporary measures on February 9, 2018 intended to preserve the Company’s cash resources. The cash preservation measures include the termination of the Amended and Restated Aradigm Corporation Executive Officer Severance Benefit Plan, the reduction of the annual base salary by 50% of certain executive officers and the reduction of the cash compensation paid to members of the Board for service on the Board and committees by 50%. Effective February 11, 2018 the three Senior Executive Officers resigned all offices and positions; the Board appointed Dr. John Siebert as the Principal Executive Officer and the Principal Financial Officer.

"We are pursuing potential alternatives to resolve our cash position in the short term as well as developing strategic options that would provide for our long term viability. We feel it is important to bring Linhaliq to commercialization in as many geographies as possible to allow patients suffering from NCFBE to get the benefits of Linhaliq. Patients, patient advocacy groups and key opinion leaders have expressed support as we work towards this goal. The MAA was filed in early March which is the first step in achieving regulatory approval in Europe," said John M. Siebert, PhD

About Non-Cystic Fibrosis Bronchiectasis

Non-CF BE is a severe, chronic and rare disease characterized by abnormal dilatation of the bronchi and bronchioles, frequently associated with chronic lung infections. It is often a consequence of a vicious cycle of inflammation, recurrent lung infections, and bronchial wall damage. Non-CF BE represents an unmet medical need with high morbidity and mortality that affects more than 150,000 people in the U.S. and over 200,000 people in Europe. There is currently no drug approved for the treatment of this condition.

On March 23, 2018 Amgen (NASDAQ:AMGN) and Allergan plc. (NYSE:AGN) reported that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has adopted a positive opinion for the marketing authorization of ABP 980, a biosimilar to Herceptin (trastuzumab) (Press release, Amgen, MAR 23, 2018, View Source;p=RssLanding&cat=news&id=2339486 [SID1234525391]). ABP 980 has been recommended for approval for the treatment of the same three types of cancer as Herceptin is approved for in the European Union (EU), including HER2-positive metastatic breast cancer, HER2-positive early breast cancer and HER2-positive metastatic adenocarcinoma of the stomach or gastroesophageal junction.

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"The positive opinion issued by the CHMP for ABP 980 marks an important step for our biosimilar portfolio, as it’s our second oncology biosimilar to reach this important milestone, and further underscores our commitment to providing the oncology community access to high-quality cancer therapies," said Sean E. Harper, M.D., executive vice president of Research and Development at Amgen. "We look forward to continuing our work with Allergan and European regulatory authorities to bring additional options to patients with cancer."

The Marketing Authorization Application for ABP 980 was supported by analytical, pharmacokinetic and clinical data, as well as pharmacology and toxicology data. The Phase 3 comparative efficacy, safety and immunogenicity study was conducted in adult female patients with HER2-positive early breast cancer.

"We are committed to providing patients with important medicines to help them fight cancer," said David Nicholson, chief research and development officer at Allergan. "The CHMP’s positive opinion for the marketing authorization of ABP 980 reinforces its potential to increase physician choice and patient access to an important biologic."
The CHMP positive opinion will now be reviewed by the European Commission (EC), which has the authority to approve medicines for the EU. If approved, a centralized marketing authorization will be granted that will be valid in the 28 countries that are members of the EU. Norway, Iceland and Liechtenstein, as members of the European Economic Area (EEA), will take corresponding decisions on the basis of the EC’s decision.

Amgen and Allergan are collaborating on the development and commercialization of four oncology biosimilars. Amgen has a total of 10 biosimilars in its portfolio, two of which have been approved by the EC.
About ABP 980

ABP 980 is being developed as a biosimilar to trastuzumab, a recombinant DNA-derived humanized monoclonal immunoglobulin G1 kappa antibody approved in many regions for the treatment of HER2-overexpressing early breast cancer, adjuvant breast cancer, metastatic breast cancer and metastatic gastric cancer. The active ingredient of ABP 980 is a humanized monoclonal antibody that has the same amino acid sequence as trastuzumab. ABP 980 has the same pharmaceutical dosage form and same strength after reconstitution as trastuzumab. Amgen and Allergan also submitted a Biologics License Application to the U.S. Food and Drug Administration (FDA) for ABP 980 in 2017.

On March 23, 2018 Ipsen (Euronext: IPN; ADR: IPSEY) reported that the Committee for Medicinal Products for Human Use (CHMP), the scientific committee of the European Medicines Agency (EMA) provided a positive opinion for Cabometyx (cabozantinib) 20, 40, 60 mg for the first-line treatment of adults with intermediate- or poor- risk advanced renal cell carcinoma (aRCC).The CHMP positive opinion will now be reviewed by the European Commission (EC), which has the authority to approve medicines for the European Union (EU).

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Alexandre Lebeaut, Executive Vice President, R&D and Chief Scientific Officer said: "Today’s positive opinion from the CHMP is important news for patients with previously untreated advanced renal cell carcinoma, who can shortly benefit from Cabometyx as a new first-line treatment option. Following the evidence of its clinical value after a prior VEGF-targeted treatment, we are pleased to be able to expand the benefit of Cabometyx for treatment-naïve patients with aRCC. We would like to sincerely thank the patients and their families as well as all health care providers who took part in the CABOSUN trial and have contributed to advancing therapies to address a high unmet need in first-line treatment of intermediate- and poor-risk patients with aRCC.."

The positive CHMP opinion follows EMA approval in 2016 for the treatment of aRCC after prior VEGF-targeted therapy. The CHMP positive opinion was based on the CABOSUN trial, which demonstrated that cabozantinib prolongs progression-free survival (PFS) in treatment-naive aRCC patients with intermediate- or poor-risk. Cabozantinib is the first and only monotherapy to demonstrate superior clinical efficacy over sunitinib in treatment-naïve aRCC patients with intermediate- or poor-risk.

The detailed recommendations for the use of this product will be described in the Summary of Product Characteristics (SmPC), to be made available once the European Commission decision is issued.

About the CABOSUN study

On May 23, 2016, Exelixis announced that CABOSUN met its primary endpoint, demonstrating a statistically significant and clinically meaningful improvement in PFS compared with sunitinib in patients with intermediate- or poor-risk aRCC per IMDC (International Metastatic RCC Carcinoma Database Consortium) criteria as determined by investigator assessment. CABOSUN was conducted by The Alliance for Clinical Trials in Oncology as part of Exelixis’ collaboration with the NCI-CTEP. These results were first presented by Dr. Toni Choueiri at the meeting of the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) 2016, and published in the Journal of Clinical Oncology (Choueiri, JCO, 2017).[i]

On June 19 2017 Exelixis announced that the analysis of the review by a blinded independent radiology review committee (IRC) has confirmed the primary efficacy endpoint results of investigator-assessed progression-free survival (PFS) from the CABOSUN randomized phase 2 trial of cabozantinib as compared with sunitinib in patients with previously untreated advanced renal cell carcinoma (RCC) with intermediate- or poor-risk disease per the International Metastatic Renal Cell Carcinoma Database Consortium (IMDC) criteria. Per the IRC analysis, cabozantinib demonstrated a clinically meaningful and statistically significant reduction in the rate of disease progression or death as measured by PFS. The incidence of adverse events (any grade) and the incidence of grade 3 or 4 adverse events between cabozantinib and sunitinib were comparable.

CABOSUN is a randomized, open-label, active-controlled phase II trial that enrolled 157 patients with aRCC determined to be intermediate- or poor-risk per IMDC criteria. Patients were randomized 1:1 to receive cabozantinib (60 mg once daily) or sunitinib (50 mg once daily, four weeks on followed by two weeks off). The primary endpoint was PFS. Secondary endpoints included overall survival and objective response rate. Eligible patients were required to have locally advanced or metastatic clear-cell RCC, ECOG performance status 0-2, and had to be intermediate- or poor-risk per IMDC criteria (Heng, JCO, 2009).[ii] Prior systemic treatment for RCC was not permitted.

About advanced Renal Cell Carcinoma

With the incidence predicted to rise 22% by 2020, renal cell carcinoma (RCC) threatens to become one of the fastest growing cancers in the world.[iii] Targeted therapies including tyrosine kinase inhibitors (TKIs) of the VEGF receptor (VEGFR) introduced a decade ago, significantly transformed the treatment landscape of aRCC.[iv]

The American Cancer Society’s 2017 statistics cite kidney cancer as one of the top ten most commonly diagnosed forms of cancer among both men and women in the U.S.[v] Clear cell RCC is the most common type of kidney cancer in adults.[vi] If detected in its early stages, the five-year survival rate for RCC is high. For patients with advanced- or late-stage metastatic RCC, however, the five-year survival rate is only 12% with no identified cure for the disease.[vii] Approximately 30,000 patients in the U.S. and 68,000 globally require treatment.[viii]

The majority of clear cell RCC tumors have lower than normal levels of a protein called von Hippel-Lindau, which leads to higher levels of MET, AXL, and VEGF.[ix]–[x] These proteins promote tumor angiogenesis (blood vessel growth), growth, invasiveness, and metastasis.[xi], [xii], [xiii], [xiv] MET and AXL may provide escape pathways that drive resistance to VEGFR inhibitors. xii – xv

About CABOMETYX (cabozantinib)

Cabometyx is an oral small molecule inhibitor of receptors, including VEGFR, MET, AXL and RET. In preclinical models, cabozantinib has been shown to inhibit the activity of these receptors, which are involved in normal cellular function and pathologic processes such as tumor angiogenesis, invasiveness, metastasis and drug resistance.

In February of 2016, Exelixis and Ipsen jointly announced an exclusive licensing agreement for the commercialization and further development of cabozantinib indications outside of the United States, Canada and Japan. This agreement was amended in December of 2016 to include commercialization rights for Ipsen in Canada. On April 25, 2016, the FDA approved Cabometyx tablets for the treatment of patients with advanced RCC who have received prior anti-angiogenic therapy and on September 9, 2016, the European Commission approved Cabometyx tablets for the treatment of advanced RCC in adults who have received prior vascular endothelial growth factor (VEGF)-targeted therapy in the European Union, Norway and Iceland. Cabometyx is available in 20 mg, 40 mg or 60 mg doses. The recommended dose is 60 mg orally, once daily.

On September 8, 2017, Ipsen announced that the EMA validated the application for cabozantinib as a treatment for first-line advanced RCC in the European Union; on March 22 2018, the CHMP issued a positive opinion for this indication.

On March 23, 2018 – Clovis Oncology, Inc. (NASDAQ:CLVS) reported the initiation of an early access program in Europe for rucaparib for treatment and as maintenance therapy in recurrent ovarian cancer (Press release, Clovis Oncology, MAR 23, 2018, View Source;p=RssLanding&cat=news&id=2339489 [SID1234524963]). The program will be overseen and implemented by Caligor Coghlan, which specializes in early access to medicines.

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The program, to be known as the Rucaparib Access Program (RAP), will enable participation from certain countries in Europe, where permitted by applicable rules, procedures and regulatory authorities. The RAP protocol allows for rucaparib treatment of an individual patient with third-line or greater BRCA mutant epithelial, fallopian tube, or primary peritoneal ovarian cancer who has platinum-sensitive disease and is unable to tolerate further platinum-based chemotherapy or has platinum-resistant disease and needs treatment with single agent rucaparib. The RAP protocol will also provide access to rucaparib for maintenance therapy of an individual patient with recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer who has received at least two prior platinum-based treatment regimens, has platinum-sensitive disease, and is in a complete or partial response to the most recent platinum-based regimen. In all cases, the patient must have a special clinical need that cannot be met by current licensed available medicines. Patients must be ineligible for Clovis’ ARIEL4 clinical trial or unable to access a participating ARIEL4 site to qualify for Clovis’ early access program.

Questions or inquiries regarding the RAP should be directed to [email protected].

About Rubraca (rucaparib)

Rubraca is an oral, small molecule inhibitor of PARP1, PARP2 and PARP3 being developed in ovarian cancer as well as several additional solid tumor indications. Studies open for enrollment or under consideration include ovarian, prostate, breast, gastroesophageal, pancreatic, lung and bladder cancers. Clovis holds worldwide rights for Rubraca.

In the United States, Rubraca is approved on an accelerated basis as monotherapy for the treatment of patients with deleterious BRCA mutation (germline and/or somatic) associated advanced ovarian cancer, who have been treated with two or more chemotherapies, and selected for therapy based on an FDA-approved companion diagnostic for Rubraca. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials. In December 2017, the U.S. Food and Drug Administration (FDA) accepted the Company’s supplemental New Drug Application (sNDA) for Rubraca for a second-line or later maintenance treatment indication in ovarian cancer based on the ARIEL3 data. The FDA granted Priority Review status to the application with a Prescription Drug User Fee Act (PDUFA) date of April 6, 2018.

Rubraca is an unlicensed medical product outside of the U.S.

About Early Access Programs

Early Access Programs provide companies with a way to allow ethical access to their pre-license/unlicensed medicines to help patients with unmet medical needs. Access is provided in response to physician requests, in a fully compliant manner, where no alternative treatment options are available.