On August 2, 2018 Emergent BioSolutions Inc. (NYSE: EBS) reported financial results for the quarter and six months ended June 30, 2018 (Press release, Emergent BioSolutions, AUG 2, 2018, View Source [SID1234528439]).

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Q2 2018 AND RECENT BUSINESS ACCOMPLISHMENTS

Completed Mutual Recognition Procedure for market authorization of BioThrax (Anthrax Vaccine Adsorbed) in five Concerned Member States within the European Union – Italy, the Netherlands, Poland, the U.K. and France; to date, BioThrax has received market authorization in four of the five countries.

Initiated an investment of up to $50 million over the next three years in the Camden fill/finish facility located in Baltimore, an expansion project that will significantly enhance the capabilities of this key site within the Company’s CDMO Business Unit.

Announced Framework Partnering Agreement under which the Company will provide technical and manufacturing support for the development and manufacture of a vaccine against Nipah virus in collaboration with Profectus BioSciences, Inc. and CEPI (Coalition for Epidemic Preparedness Innovations); under a separate agreement with Profectus, Emergent will retain the exclusive option to license and assume control of development activities for the Nipah virus vaccine from Profectus.

Initiated a Phase 1 clinical study of ZIKV-IG, the Company’s anti-Zika virus immune globulin being developed as a therapeutic intervention against Zika virus disease; the candidate was granted Fast Track designation by the U.S. Food and Drug Administration in December 2017.

2018 FINANCIAL PERFORMANCE

(I) Quarter Ended June 30, 2018 (Unaudited)

Revenues

Total Revenues
For Q2 2018, total revenues were $220.2 million, an increase of 118% over 2017. Total revenues reflect a significant increase in product sales.

Product Sales
For Q2 2018, product sales were $180.1 million, an increase of 183% as compared to 2017. The increase is principally attributable to sales of BioThrax and ACAM2000, (Smallpox (Vaccinia) Vaccine Live) previously expected in the first quarter as well as continued sales of both products in the second quarter.

Contract Manufacturing
For Q2 2018, revenue from the Company’s contract manufacturing operations was $23.6 million, an increase of 46% as compared to 2017. The increase primarily reflects manufacturing services at the Company’s Canton site.

Contracts and Grants
For Q2 2018, revenue from the Company’s development-based contracts and grants was $16.5 million, a decrease of 21% as compared to 2017. The decrease primarily reflects a reduction in R&D activities related to certain ongoing funded development programs.

Operating Expenses

Cost of Product Sales and Contract Manufacturing
For Q2 2018, cost of product sales and contract manufacturing was $89.2 million, an increase of 158% as compared to 2017. The increase was primarily attributable to the increase in product sales and contract manufacturing activities at the Company’s Bayview and Canton facilities.

Research and Development (Gross and Net)
For Q2 2018, gross R&D expenses were $24.7 million, a decrease of 4% as compared to 2017. The decrease primarily reflects lower costs associated with contract development services.

For Q2 2018, net R&D expense (calculated as gross research and development expenses minus contracts and grants revenue) was $8.2 million, an increase of $3.4 million as compared to 2017, reflecting increased investment in development-stage programs not currently funded in whole or in part by third-party partners. These include costs associated with the Raxibacumab (Anthrax Monoclonal Antibody) technology transfer and the SIAN device, an intranasal antidote spray device for the treatment of known or suspected acute cyanide poisoning.

Selling, General and Administrative
For Q2 2018, selling, general and administrative expenses were $39.5 million, an increase of 24% as compared to 2017, attributable primarily to increased professional services and compensation-related costs.

Income Taxes
For Q2 2018, the provision for income tax expense in the amount of $15.7 million includes a discrete benefit of $0.9 million primarily related to stock compensation activity resulting in an effective tax rate of 24%. Excluding the discrete benefit, the Q2 2018 effective tax rate was 25%.

Net Income & Adjusted Net Income
For Q2 2018, the Company recorded net income of $50.1 million, or $0.98 per diluted share, versus net income of $4.6 million, or $0.11 per diluted share, in 2017. (1).

For Q2 2018, the Company recorded adjusted net income of $54.7 million, or $1.07 per diluted share, versus adjusted net income of $6.6 million, or $0.13 per diluted share, in 2017. (1) (2)

(I) Six Months Ended June 30, 2018 (Unaudited)

Revenues

Total Revenues
For the six months of 2018, total revenues were $338.0 million, an increase of 55% over 2017. Total revenues reflect a significant increase in product sales.

Product Sales
For the six months of 2018, product sales were $255.8 million, an increase of 76% as compared to 2017. The increase is principally attributable to sales of ACAM2000 and Raxibacumab, both of which were acquired in Q4 2017.

Contract Manufacturing
For the six months of 2018, revenue from the Company’s contract manufacturing operations was $49.8 million, an increase of 47% as compared to 2017. The increase primarily reflects the completion of a milestone related to the expansion of certain contract manufacturing capabilities at the Company’s Lansing site and manufacturing services at the Company’s Canton site.

Contracts and Grants
For the six months of 2018, revenue from the Company’s development-based contracts and grants was $32.4 million, a decrease of 15% as compared to 2017. The decrease primarily reflects a reduction in revenue associated with the successful completion of multiple U.S. government development contracts, as well as reduced R&D activities related to certain ongoing funded development programs.

Operating Expenses

Cost of Product Sales and Contract Manufacturing
For the six months of 2018, cost of product sales and contract manufacturing was $147.2 million, an increase of 82% as compared to 2017. The increase was primarily attributable to the increase in product sales and contract manufacturing activities at the Company’s Bayview and Canton facilities.

Research and Development (Gross and Net)
For the six months of 2018, gross R&D expenses were $53.8 million, an increase of 16% as compared to 2017. The increase primarily reflects costs associated with contract development services, including the cost associated with the technology transfer of the Raxibacumab manufacturing process to the Company’s Bayview manufacturing site in Baltimore.

For the six months of 2018, net R&D expense was $21.4 million, an increase of $13.5 million as compared to 2017, reflecting increased investment in countermeasure development programs not currently funded in whole or in part by third-party partners, notably costs associated with the Raxibacumab technology transfer and the SIAN device, an intranasal antidote spray device for the treatment of known or suspected acute cyanide poisoning.

Selling, General and Administrative
For the six months of 2018, selling, general and administrative expenses were $79.7 million, an increase of 19% as compared to 2017, attributable primarily to increased professional services and compensation-related costs.

Income Taxes
For the six months of 2018, the provision for income tax expense in the amount of $11.2 million includes a discrete benefit of $3.2 million primarily related to stock compensation activity resulting in an effective tax rate of 20%. Excluding the discrete benefit, the six months of 2018 effective tax rate was 25%.

Net Income & Adjusted Net Income
For the six months of 2018, the Company recorded net income of $45.2 million, or $0.89 per diluted share, versus net income of $15.1 million, or $0.35 per diluted share, in 2017. (1)

For the six months of 2018, the Company recorded adjusted net income of $53.1 million, or $1.04 per diluted share, versus adjusted net income of $20.8 million, or $0.42 per diluted share, in 2017. (1) (2)

2018 FINANCIAL FORECAST & OPERATIONAL GOALS
The Company is reaffirming its full year 2018 financial performance forecast:
· Total Revenue
$715 million to $755 million
· Pre-Tax Income
$120 million to $140 million
· Net Income (3)
$95 million to $110 million
· Adjusted Net Income (2) (3)
$110 million to $125 million
· EBITDA (2) (3)
$175 million to $190 million

The Company is also reaffirming its full year 2018 operational goals:

Advance NuThrax development to enable Emergency Use Authorization filing with the FDA in 2018

Complete ACAM2000 deliveries; establish a multi-year follow-on contract with the U.S. government

Deliver Raxibacumab doses under current contract; advance technology transfer to the Company’s Bayview facility in Baltimore, Maryland

Progress pipeline to have at least four product candidates in advanced development

Complete an acquisition that generates revenue within 12 months of closing

Q3 2018 FINANCIAL FORECAST
The Company forecast for Q3 2018 total revenue is $165 million to $190 million.

FOOTNOTES
(1)
See "Calculation of Diluted Earnings Per Share."
(2)
See "Reconciliation of Net Income to Adjusted Net Income and EBITDA" for a definition of terms and a reconciliation table.
(3)
Reflects an estimated tax rate that includes the expected effects of the United States Tax Cuts and Jobs Act of 2017 on the Company’s 2018 income tax provision.

CONFERENCE CALL AND WEBCAST INFORMATION
Company management will host a conference call at 5:00 pm (Eastern Time) today, August 2, 2018, to discuss these financial results. This conference call can be accessed live by telephone or through Emergent’s website:

Live Teleconference Information:
Dial in: [US] (855) 766-6521; [International] (262) 912-6157
Conference ID: 93342423

Live Webcast Information:
Visit View Source for the live webcast feed.

A replay of the call can be accessed at www.emergentbiosolutions.com under "Investors."

On August 2, 2018 Loxo Oncology, Inc. (Nasdaq:LOXO), a biopharmaceutical company developing highly selective medicines for patients with genomically defined cancers, reported that it will announce financial results for the second quarter ended June 30, 2018 on August 9, 2018 before the Nasdaq market open (Press release, Loxo Oncology, AUG 2, 2018, View Source [SID1234528319]). At 8:00 a.m. ET that day, Loxo Oncology management will host a conference call to discuss these financial results, in addition to recent updates on development and corporate activities.

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A live webcast can be accessed under "Events & Presentations" in the Investors & Media section of the company’s website at www.loxooncology.com. The conference call can be accessed by dialing (877) 930-8065 (domestic) or (253) 336-8041 (international) and referring to conference ID 7291605. The webcast will be archived and made available for replay on the company’s website beginning approximately two hours after the event.

On August 2, 2018 OncoMed Pharmaceuticals, Inc. (NASDAQ:OMED), a clinical-stage biopharmaceutical company focused on discovering and developing novel anti-cancer therapeutics, reported second quarter 2018 financial results and provided a corporate update (Press release, OncoMed, AUG 2, 2018, View Source [SID1234528346]). As of June 30, 2018, cash, cash equivalents, and short-term investments totaled $79.9 million.

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"The first half of the year has been focused on effective execution in the development of our pipeline of oncology candidates, including navicixizumab, etigilimab (anti-TIGIT) and GITRL-Fc which are being investigated in ongoing clinical trials," said John Lewicki, Ph.D., President and Chief Executive Officer of OncoMed. "These activities will culminate in important data announcements later this year. We are particularly encouraged by the potential of navicixizumab, our lead product candidate, in the treatment of late-stage ovarian cancer and look forward to sharing single-agent and chemotherapy combination data by the end of the year. We also plan to report first-in-human dose escalation Phase 1a data from our etigilimab program in the fourth quarter of 2018, while early clinical data from our GITRL-Fc program will likely be available in the first half of 2019."

Pipeline Highlights

Navicixizumab (anti-DLL4/VEGF bispecific; OMP-305B83)

An abstract summarizing interim Phase 1b clinical trial data of navicixizumab in combination with paclitaxel for the treatment of heavily pretreated, platinum-resistant ovarian cancer patients has been accepted as a poster presentation on October 20, 2018 at the European Society for Medical Oncology meeting in Munich, Germany. In addition, the company expects to publish the final results of the Phase 1a single-agent

navicixizumab study in all-comers solid tumor patients, which included several late-stage ovarian cancer patients, by the end of 2018.

The company has decided to prioritize navicixizumab development resources in platinum-resistant ovarian cancer, where it believes navicixizumab offers promise and potential as a meaningful therapeutic for patients who lack effective later-line therapeutic alternatives. Consequently, OncoMed has decided to discontinue enrollment of additional patients in its Phase 1b trial of navicixizumab in combination with FOLFIRI or FOLFOX in second-line colorectal cancer as it pursues expanded development in ovarian cancer. The Phase 1b ovarian cancer trial was recently expanded from 30 patients to enroll up to 60 patients.

Etigilimab (Anti-TIGIT; OMP-313M32)

In the second quarter, OncoMed initiated the Phase 1b portion of the Phase 1a/b study of etigilimab in combination with anti-PD1 (nivolumab) in patients with advanced or metastatic solid tumors. The company also completed dose-escalation in the Phase 1a portion of the trial and is now enrolling patients in the single-agent expansion phase of this study. The company expects to report data from the Phase 1a dose-escalation portion of the trial, designed to assess safety and tolerability of escalating doses of etigilimab monotherapy, in the fourth quarter of 2018.

GITRL-Fc (OMP-336B11)

Enrollment continues in the Phase 1a single-agent study of OncoMed’s wholly-owned GITRL-Fc in patients with advanced or metastatic solid tumors. GITRL-Fc is a fusion protein with an Fc-linked fully human trimer ligand and is designed to activate the co-stimulatory receptor GITR (glucocorticoid-induced tumor necrosis factor receptor-related protein) to enhance T-cell modulated immune responses. Data from the Phase 1a trial are expected to be presented in 2019.

Second Quarter 2018 Financial Results

Cash, cash equivalents and short-term investments totaled $79.9 million as of June 30, 2018, compared to $103.1 million as of December 31, 2017.

Revenues were $6.9 million for the second quarter of 2018, an increase of $0.7 million, compared to $6.2 million for the same period in 2017. The change in revenue was a result of the new revenue recognition standard adopted in the first quarter of 2018.

Research and development (R&D) expenses were $8.1 million for the second quarter of 2018, a decrease of $7.0 million, compared to $15.1 million for the same period in 2017. The decrease in R&D expenses was due to decreases in clinical development costs and reduced headcount as a result of the restructuring actions in April 2017.

General and administrative (G&A) expenses were $3.7 million for the second quarter of 2018, a decrease of $0.4 million, compared to $4.1 million for the same period in 2017. The decrease in G&A expenses was primarily due to a decrease in personnel cost, including stock-based compensation.

Net loss was $4.0 million ($0.10 per share) for the second quarter of 2018, compared to $15.2 million ($0.40 per share) for the same period of 2017. The change in year-over-year net loss was primarily due to lower operating expenses in the second quarter of 2018.

2018 Financial Guidance

With resource reprioritization and additional cash management measures, OncoMed’s current cash runway has been extended by one quarter and is now estimated to fund operations through at least the fourth quarter of 2019, without taking into account future potential milestone or opt-in payments from its partners. OncoMed estimates 2018 operating cash burn to be less than $55 million, before considering potential milestone or opt-in payments

On August 2, 2018 Selecta Biosciences, Inc. (Nasdaq:SELB), a clinical-stage biopharmaceutical company focused on unlocking the full potential of biologic therapies by mitigating unwanted immune responses, reported that CFO and Head of Corporate Strategy John Leaman, M.D., will be present at the Canaccord Genuity 38th Annual Growth Conference in Boston, Mass. at 2 p.m. ET on Thursday, August 09, 2018 (Press release, Selecta Biosciences, AUG 2, 2018, View Source [SID1234528384]). A live and archived webcast of the presentation will be available on the Investors & Media section of the Selecta website at www.selectabio.com.

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On August 2, 2018 Acceleron Pharma Inc. (Nasdaq:XLRN), a leading biopharmaceutical company in the discovery and development of TGF-beta therapeutics to treat serious and rare diseases, reported financial results for the second quarter ended June 30, 2018.

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"We have had a very successful start to 2018, and we look forward to carrying this momentum forward throughout the rest of the year and beyond. We are extremely pleased that luspatercept, our lead product candidate and first-in-class erythroid maturation agent, achieved positive and highly statistically significant Phase 3 results in both the MEDALIST and BELIEVE trials, confirming our confidence in its clinical profile in myelodysplastic syndromes and beta-thalassemia," said Habib Dable, President and Chief Executive Officer of Acceleron. "We and our collaboration partner, Celgene, look forward to presenting the Phase 3 data at an upcoming medical congress and are focused on the execution of key regulatory activities, including US and EU submission in the first half of 2019. We believe luspatercept is a potential platform treatment to transform the lives of patients suffering from a range of hematologic diseases associated with anemia.
Added Mr. Dable: "Our neuromuscular and pulmonary programs achieved critical milestones, putting us in a position for important Phase 2 readouts for ACE-083 and sotatercept in 2019 and 2020, respectively."

Development Program Highlights

Hematology

Luspatercept:

Myelodysplastic Syndromes (MDS), Beta-Thalassemia, and Myelofibrosis (MF)
Luspatercept is a first-in-class erythroid maturation agent (EMA) designed to treat the late-stage erythroid maturation defect that results in chronic anemia and the need for regular red blood cell transfusions in adults with serious hematologic diseases. Luspatercept is part of the global collaboration between Acceleron and Celgene.

The MEDALIST and BELIEVE Phase 3 trials in patients with lower-risk MDS and transfusion-dependent beta-thalassemia, respectively, met all primary and key secondary endpoints.

Data will be submitted to a future medical meeting for presentation in late 2018.

Acceleron and Celgene plan to submit regulatory filings in the United States and Europe in the first half of 2019.

Updated results from the ongoing Phase 2 trials in MDS and beta-thalassemia were presented at the 2018 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting and the 23rd Congress of the European Hematology Association (EHA) (Free EHA Whitepaper) in June 2018.

The initiation of the COMMANDS Phase 3 trial in patients with lower-risk MDS who are treatment naïve is planned for the third quarter of 2018.

Enrollment and treatment are ongoing in the BEYOND Phase 2 trial in non-transfusion-dependent beta-thalassemia and the Phase 2 trial in MF.

Neuromuscular Disease

ACE-083:

Facioscapulohumeral Muscular Dystrophy (FSHD) and Charcot-Marie-Tooth (CMT) Disease
ACE-083 is a locally-acting therapeutic designed to have a concentrated effect on muscle mass and strength in target muscles for diseases that cause focal muscle weakness. ACE-083 utilizes the "Myostatin+" approach to inhibit multiple TGF-beta ligands.

Preliminary results from Part 1 of the ACE-083 Phase 2 trial in patients with CMT disease were highlighted in oral and poster presentations at the 2018 Peripheral Nerve Society (PNS) Annual Meeting in July.

Part 2 of the Phase 2 trial in patients with CMT was recently initiated with preliminary results expected by the end of 2019.

The Company plans to present results from all Part 1 dose cohorts in the FSHD Phase 2 trial in October 2018.

Enrollment and treatment are ongoing in Part 2 of the Phase 2 trial in patients with FSHD and preliminary results are expected in the second half of 2019.

ACE-083 received FDA Fast Track status and Orphan Drug designation in FSHD.

ACE-2494:
ACE-2494 is designed to have a systemic effect on muscle mass and strength for diseases that cause muscle weakness throughout the body. ACE-2494 utilizes the "Myostatin+" approach to inhibit multiple TGF-beta ligands.

Enrollment and treatment are ongoing in the Phase 1 healthy volunteer trial with preliminary results expected in the first half of 2019.

Pulmonary Disease
Sotatercept:

Pulmonary Arterial Hypertension (PAH)

Sotatercept acts as a ligand trap for members of the TGF-beta superfamily directly involved in the BMP signaling pathway, which is proven critical for maintaining healthy pulmonary vasculature. In multiple preclinical studies in PAH, sotatercept significantly decreased pulmonary vessel muscularization, improved pulmonary arterial pressures, and decreased indicators of right heart failure.

The Company initiated the PULSAR Phase 2 trial in patients with PAH with preliminary results expected in the first half of 2020.

The Company plans to initiate an exploratory imaging study in Q1 2019 to provide additional understanding of endpoints in anticipation of a potential pivotal trial in the future.

In November 2018, the Company will host a PAH Research and Development Deep Dive event in New York City.

The event will include internal and external expert presentations to discuss disease background, current treatment landscape, key disease pathways including BMP signaling, Acceleron’s clinical development activities, and the latest sotatercept preclinical results.

Corporate Highlights

Robert K. Zeldin, M.D., was appointed Chief Medical Officer (CMO). He brings 20 years of industry experience and joined from Ablynx, where he served as Chief Medical Officer. Prior to Ablynx, Dr. Zeldin served in senior roles at Novartis, Merck, and the U.S. Food & Drug Administration’s Center for Biologics Evaluation and Research.

Janethe Pena, M.D., Ph.D., recently joined us as Vice President of Pulmonary to lead the company’s clinical development efforts in this area. Dr. Pena most recently served as Vice President and Group Head of Pulmonology Clinical Development at Bayer Pharmaceuticals. At Bayer, she was responsible for the pulmonary portfolio, including leading clinical trials with riociguat (Adempas) in different pulmonary hypertension indications and the overall program life cycle management.
Financial Results

Cash position – Cash, cash equivalents and investments as of June 30, 2018 were $332.3 million. As of December 31, 2017, the Company had cash, cash equivalents and investments of $372.9 million. The Company believes that existing cash, cash equivalents and investments will be sufficient to fund projected operating requirements into 2021.

Revenue – Collaboration revenue for the second quarter was $3.7 million. The revenue is all from Acceleron’s partnership with Celgene and is primarily related to expenses incurred by the Company in support of luspatercept.

Costs and expenses – Total costs and expenses for the second quarter were $33.6 million. This includes R&D expenses of $25.9 million and G&A expenses of $7.7 million.

Net loss – The Company’s net loss for the second quarter ended June 30, 2018 was $28.9 million.
Conference Call and Webcast
The Company will host a webcast and conference call to discuss its second quarter financial results for 2018 and provide an update on recent corporate activities on August 2, 2018, at 5:00 p.m. EDT.

The webcast will be accessible under "Events & Presentations" in the Investors/Media page of the Company’s website at www.acceleronpharma.com. Individuals can participate in the conference call by dialing 877-312-5848 (domestic) or 253-237-1155 (international) and referring to the "Acceleron Second Quarter 2018 Earnings Call."

The archived webcast will be available for replay on the Acceleron website approximately two hours after the event.