On May 09, 2016 Vical Incorporated (Nasdaq:VICL) reported financial results for the three months ended March 31, 2016 (Press release, Vical, MAY 9, 2016, View Source [SID:1234512130]). Net loss for the first quarter of 2016 was $2.4 million, or $0.03 per share, compared with a net loss of $3.8 million, or $0.04 per share, for the first quarter of 2015. Revenues for the first quarter of 2016 were $4.6 million, compared with revenues of $4.9 million for the first quarter of 2015, reflecting revenues from Astellas Pharma Inc. for manufacturing services performed under our ASP0113 collaborative agreements. ASP0113 is Vical’s therapeutic vaccine designed to prevent cytomegalovirus (CMV) disease and associated complications in transplant recipients.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Vical had cash and investments of $40.3 million at March 31, 2016. The Company’s net cash use for the first quarter of 2016 was $1.7 million, which was consistent with the Company’s guidance for the full year. The Company is projecting net cash burn for 2016 between $8 million and $11 million.

Program updates include:

ASP0113 CMV Vaccine

The multinational Phase 3 registration trial in 500 hematopoietic cell transplant (HCT) recipients is ongoing and over 80% of the subjects have now been enrolled. Astellas expects enrollment to be completed by the third quarter of 2016, with the top-line data available in the fourth quarter of 2017. The primary endpoint of this trial is a composite of overall mortality and CMV end organ disease. Vical and Astellas have initiated process validation activities for the manufacture of the bulk drug product in anticipation of a potential BLA filing in 2018.

Enrollment in the multinational Phase 2 trial in kidney transplant recipients was completed in May 2015 and the last subject is expected to complete 1 year of follow up later this month. The primary endpoint of this trial is the incidence of CMV viremia and the study is powered to show an approximately 50% reduction in CMV viremia at 1 year after transplantation. Astellas expects the top-line trial data to be available in the third quarter of 2016.

HSV-2 Therapeutic Vaccine

Trial results, including data on multiple endpoints evaluating safety and efficacy, from our recently completed HSV-2 Phase 1/2 trial will be presented in an oral late-breaker presentation at the American Society of Microbiology (ASM) Microbe/ICAAC 2016 conference on June 20, 2016 in Boston, Massachusetts.

VL-2397 Antifungal

Enrollment is ongoing in Vical’s first-in-human Phase 1 trial of its novel antifungal, VL-2397. The randomized, double-blind, placebo-controlled trial is intended to evaluate safety, tolerability and pharmacokinetics of single and multiple ascending doses of VL-2397 in healthy volunteers. The trial is expected to be complete by the end of 2016. The U.S. Food and Drug Administration has granted Vical Fast Track, qualified infectious disease product (QIDP) and orphan drug designations for VL-2397 for the treatment of invasive aspergillosis. This invasive fungal infection is associated with a high rate of mortality in immunocompromised patients, underscoring the need for new antifungal therapies. Vical is working closely with a core team of expert advisors to design a proof of concept efficacy study for VL-2397 in the treatment of patients with invasive aspergillosis.

Vical will conduct a conference call and webcast today, May 9, at noon Eastern Time, to discuss the Company’s financial results and program updates with invited participants. The call and webcast are open on a listen-only basis to any interested parties. To listen to the conference call, dial in approximately ten minutes before the scheduled call to (719) 325-2484 (preferred), or (888) 523-1228 (toll-free), and reference confirmation code 9062407. A replay of the call will be available for 48 hours beginning about two hours after the call. To listen to the replay, dial (719) 457-0820 (preferred) or (888) 203-1112 (toll-free) and enter replay passcode 9062407. The call will also be available live and archived through the events page at www.vical.com. For further information, contact Vical’s Investor Relations department by phone at (858) 646-1127 or by e-mail at [email protected].

On May 9, 2016 PureTech Health plc ("PureTech," LSE: PRTC) reported the launch of Vor BioPharma, an immuno-oncology company dedicated to developing a new class of targeted cell therapies (Press release, FierceBiotech, MAY 9, 2016, View Source [SID:1234512233]). The company, which is advancing a novel approach to chimeric antigen receptor (CAR) T-cell therapy, has licensed its core technology from the lab of Vor scientific co-founder, Siddhartha Mukherjee, M.D., Ph.D., Assistant Professor of Medicine at Columbia University and Pulitzer Prize-winning author of The Emperor of All Maladies: A Biography of Cancer.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"PureTech is excited to be collaborating with Sid Mukherjee and to have the support of a world-class team of immunologists and oncologists"
Tweet this
"CAR T-cell therapies have shown remarkable progress in the clinic, yet their applicability beyond a small subset of cancers is currently very limited," said Sanjiv Sam Gambhir, M.D., Ph.D., Vor Scientific Advisory Board Member, Professor of Radiology and Bioengineering, Chair of the Department of Radiology, Director of the Canary Center for Cancer Early Detection and Director of the Molecular Imaging Program at Stanford University. "This technology seeks to address bottlenecks that prevent CAR T-cell therapy from becoming more broadly useful in treating cancers outside of B-cell cancers."

Researchers continue to make big advances in using the immune system to fight cancer. CAR T-cell therapy, which modifies the body’s own immune cells (T-cells) to recognize and kill cancer cells, has emerged as a promising therapy for patients with advanced B-cell leukemias. These approaches have focused on targeting markers that are present on all B-cells, both healthy and cancerous. While the body can safely function without B-cells, using CAR T-cell therapy to treat other cancers—which would involve targeting cells necessary for survival—remains elusive. Furthermore, CAR T-cell therapy has shown more limited results in treating solid tumors. Vor is developing an entirely new approach to CAR T-cell therapy that seeks to broaden its applicability in other cancers, particularly those with limited therapeutic options, by removing key barriers generated by current modalities.

"We continue to make great strides in developing new ways to treat cancer using the body’s immune system," said Dr. Mukherjee. "The positive clinical response researchers have achieved with CAR T-cell therapies in B-cell leukemias has led to great interest within the oncology community and is something we hope to achieve in other cancers over time."

"PureTech is excited to be collaborating with Sid Mukherjee and to have the support of a world-class team of immunologists and oncologists," said David Steinberg, Executive Vice President of PureTech Health and Co-Founder of Vor BioPharma. "We look forward to advancing this technology that has the potential to expand immuno-oncology to currently untreatable, fatal malignancies."

Leading oncologists and immunologists are supporting Vor in developing its pipeline of novel immunotherapies. The company’s team of scientific founders and Scientific Advisory Board (SAB) members includes:

Joseph Bolen, Ph.D. – Scientific Advisory Board member and acting Chief Scientific Officer of Vor BioPharma and former President and Chief Scientific Officer of Moderna Therapeutics. Dr. Bolen has more than 30 years of industry and research experience and has been at the forefront of cancer and immunology research. He began his career at the NIH, where he contributed to the discovery of a class of proteins known as tyrosine kinase oncogenes as key regulators of the immune system. Dr. Bolen most recently oversaw all aspects of research and development for Moderna. Previously, he was Chief Scientific Officer and Global Head of Oncology Research at Millennium: The Takeda Oncology Company. Prior to joining Millennium in 1999, Dr. Bolen held senior research and development positions at Hoechst Marion Roussel, Schering-Plough, and Bristol-Myers Squibb.
Sanjiv Sam Gambhir, M.D., Ph.D. – Professor of Radiology, Materials Science & Engineering, and Bioengineering at Stanford University, where he is also the Chair of the Department of Radiology, Director of the Canary Center for Cancer Early Detection and Director of the Molecular Imaging Program. His research focuses on interrogating cellular and molecular events in living subjects through imaging and on the early detection of cancer. He is the recipient of over $90M in NIH funding as the principal investigator and served on the NCI Board of Scientific advisors for eight years. Dr. Gambhir has received several awards including the Hounsfield Medal, Tesla Medal, Holst Medal, and is an elected fellow of the National Academy of Medicine, as well as the National Academy of Inventors. He has co-founded several startups and is an advisor to several large corporations and biotechnology startups.
Dan Littman, M.D., Ph.D. – Howard Hughes Medical Institute Investigator and the Helen L. and Martin S. Kimmel Professor of Molecular Immunology and Professor of Pathology and Microbiology at New York University (NYU) School of Medicine. Dr. Littman has made numerous groundbreaking discoveries in the field of virology and immunology, including identification and isolation of receptors required for human immunodeficiency virus (HIV) entry, molecular mechanisms of immune cells that mediate autoimmunity and the role of specific members of the gut microbiota in T-cell differentiation. Dr. Littman is a Fellow of the American Academy of Arts and Sciences and is a Member of the National Academy of Sciences. He was awarded the 2004 New York City Mayor’s Award for Excellence in Science and Technology.
Siddhartha Mukherjee, M.D., Ph.D. – Assistant Professor of Medicine at Columbia University and oncologist. Dr. Mukherjee is the author of The Emperor of All Maladies: A Biography of Cancer, winner of the 2011 Pulitzer Prize in general nonfiction, and The Laws of Medicine. He has published distinguished articles in numerous publications, including Nature, The New England Journal of Medicine, Cell and The New York Times.
Derrick J. Rossi, Ph.D. – Associate Professor in the Stem Cell and Regenerative Biology Department at Harvard Medical School and Harvard University. Dr. Rossi is an investigator in the Program in Cellular and Molecular Medicine at Boston Children’s Hospital, and is also a principal faculty member of the Harvard Stem Cell Institute. TIME Magazine cited Dr. Rossi’s discovery of modified-mRNA reprogramming as one of the top ten medical breakthroughs of 2010. TIME Magazine also named Dr. Rossi as one of "People Who Mattered" in 2010, and as one of the 100 Most Influential People (Time 100) in 2011. Dr. Rossi co-founded Moderna Therapeutics and Intellia Therapeutics.

On May 9, 2016 Fate Therapeutics, Inc. (NASDAQ: FATE), a biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders, reported business highlights and financial results for the first quarter ended March 31, 2016 (Filing, Q1, Fate Therapeutics, 2016, MAY 9, 2016, View Source [SID:1234512415]).

"We are gratified by the strong interest and the collaborative involvement with ProTmune that we have received from the allogeneic hematopoietic cell transplant community during this launch stage of our Phase 1/2 clinical trial. The level of community engagement underscores that GvHD remains a significant cause of morbidity and mortality in transplant recipients," said Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics. "Our ex vivo immune cell programming approach to prevent GvHD is novel and highly differentiated and avoids costly and cumbersome processes such as the depletion or genetic engineering of donor T cells. As we move ahead in 2016 with ProTmune, we look forward to enrolling the Phase 1 stage of the study with immune cells from matched unrelated donors and to sharing safety and efficacy data."

Recent Highlights & Program Updates

· ProTmune Phase 1/2 Clinical Trial to Commence Enrollment in mid-2016. In January 2016, Fate Therapeutics announced that its Investigational New Drug (IND) application for ProTmune (FT1050-FT4145 programmed mobilized peripheral blood (mPB) cells) was cleared by the U.S. Food and Drug Administration. The Company is poised to begin subject enrollment in a multi-center, randomized, controlled study that is designed to evaluate safety and the potential of ProTmune to prevent acute graft-versus-host disease (GvHD) and cytomegalovirus (CMV) infection, both of which are leading causes of morbidity and mortality in patients undergoing allogeneic hematopoietic cell transplantation (HCT). There are currently no approved therapies for the prevention of GvHD or CMV infection in patients undergoing allogeneic HCT, giving rise to a significant unmet medical need.

· Cancer-Fighting Properties of ProTmune Presented at 2016 BMT Tandem Meetings. In February 2016, Fate Therapeutics presented preclinical data at the BMT Tandem Meetings in Honolulu, Hawaii demonstrating that FT1050-FT4145 programmed T cells retain anti-tumor, or graft-versus-leukemia (GvL), activity in vivo. GvL activity of T cells is critical to eradicating residual cancer and realizing the curative potential of allogeneic HCT. These data complement previously presented preclinical data demonstrating that the adoptive transfer of FT1050-FT4145 programmed mPB cells results in a statistically-significant reduction in GvHD score and improvement in survival in a murine model of allogeneic HCT.

· NK Cell Cancer Immunotherapy Program to be Highlighted at Innate Killer Summit 2016. Dr. Jeffrey Miller, M.D., Professor of Medicine and Deputy Director, University of Minnesota Cancer Center, plans to provide an overview of the Company’s NK cell cancer immunotherapy program at the Innate Killer Summit 2016 in San Diego, California from May 16-17, 2016. Fate Therapeutics is currently advancing through clinical translation a small molecule (FT1238) programmed NK cell therapy, which is comprised of highly-specialized "adaptive" NK cells that exhibit persistence and direct anti-tumor and antibody-dependent cell-mediated cytotoxicity as compared to other NK cell populations.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

· CD34+ Immuno-Regulatory Cell Therapy Program to be Presented at ADA’s Scientific Sessions. Fate Therapeutics plans to present an abstract from its pharmacologically-modulated CD34+ cell therapy program at the American Diabetes Association’s 76th Scientific Sessions in New Orleans, Louisiana from June 10-14, 2016. The Company has previously shown in preclinical studies that programmed CD34+ cells have immuno-regulatory properties with the potential to traffic to sites of T-cell proliferation and express powerful immunosuppressive factors, including PD-L1.

First Quarter 2016 Financial Results

· Cash & Short-term Investment Position: Cash, cash equivalents and short-term investments as of March 31, 2016 were $55.6 million compared to $64.8 million as of December 31, 2015. The decrease is primarily driven by the Company’s use of cash to fund operating activities and to service principal and interest obligations under its loan agreement with Silicon Valley Bank.

· Total Revenue: Revenue was $1.3 million for the first quarter of 2016. All revenue was derived from the Company’s research collaboration and license agreement with Juno Therapeutics.

· Total Operating Expenses: Total operating expenses were $9.2 million for the first quarter of 2016 compared to $7.3 million for the comparable period in 2015. Operating expenses for the first quarter of 2016 include $0.8 million of stock compensation expense, compared to $0.6 million for the first quarter of 2015.

· R&D Expenses: Research and development expenses were $6.6 million for the first quarter of 2016 compared to $4.6 million for the comparable period in 2015. The increase in R&D expenses is primarily related to the conduct of the Company’s collaboration with Juno, including the hiring of additional employees and the purchase of equipment and materials, and the conduct of preclinical development activities under its sponsored research agreements with the University of Minnesota and Boston Children’s Hospital.

· G&A Expenses: General and administrative expenses were $2.6 million for the first quarter of 2016 compared to $2.8 million for the comparable period in 2015. The decrease in G&A expenses is primarily related to a decrease in corporation stock registration fees.

· Common Shares Outstanding: Common shares outstanding as of March 31, 2016 were 28.9 million compared to 28.7 million as of December 31, 2015. Common shares outstanding increased primarily as a result of the issuance of shares under the Company’s equity incentive plan.

On May 9, 2016 Eagle Pharmaceuticals, Inc. ("Eagle" or "the Company") (Nasdaq: EGRX) reported its financial results for the first quarter ended March 31, 2016 (Press release, Eagle Pharmaceuticals, MAY 9, 2016, View Source [SID:1234512110]). Highlights of and subsequent to the first quarter of 2016 include:

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Business Highlights:

Bendeka was launched January 28, 2016 by Eagle’s marketing partner, Teva Pharmaceutical Industries (Teva); total market share, as of May 6, 2016, was 71% and 77% in core hospital outpatient and clinic segments combined (representing 70% of the total market);
Eagle entered into an agreement with the National Institutes of Health (NIH)/National Institute on Drug Abuse (NIDA) to explore the use of Ryanodex in the treatment of hyperthermia related to MDMA (Ecstasy) and Methamphetamine intoxication;
Eagle entered into an agreement to divest diclofenac-misoprostsol to a third party in exchange for $1.75 million and a 25% royalty on net profits for five years; and,
Eagle completed its first quarter with an internal salesforce fully focused on commercialization of Eagle’s in-market products.
Financial Highlights:

Total revenue was $29.6 million during the first quarter of 2016 compared to $36.3 million for the three months ended March 31, 2015;
Product sales increased to $14.1 million during the first quarter of 2016 compared to $3.1 million for the three months ended March 31, 2015;
Sales of Ryanodex grew 5% quarter over quarter to $1.9 million during the first quarter of 2016;
Net loss was $896,000, or $0.06 per basic and diluted share, compared to net income of $19.7 million, or $1.38 per basic and $1.31 per diluted share, for the three months ended March 31, 2016 and 2015, respectively; and,
Cash and cash equivalents were $78.3 million as of March 31, 2016.
"Our business outlook for the Company remains bright. Our bendamustine product family offers significant opportunity for growth and is being accepted well by physicians and patients. Assuming bendamustine generics do not come to market, and with Bendeka gaining momentum, based on its product profile which customers seem to prefer, we believe Bendeka is on track to reach Teva’s and our shared goal of 90% market share or greater and will be an important earnings driver for Eagle for years to come," said Scott Tarriff, President and Chief Executive Officer of Eagle Pharmaceuticals.

"In addition to our other product candidates, we believe Ryanodex has the potential for multiple additional clinical indications. These opportunities in treating exertional heat stroke and ecstasy and methamphetamine intoxication, if approved, would open up significant new markets for the product. We are encouraged by the potential of our products to deliver solutions that address life-threatening conditions and improve treatment outcomes and look forward to upcoming milestones that we expect will drive meaningful earnings growth," concluded Tarriff.

First Quarter 2016 Financial Results

Total revenue for the three months ended March 31, 2016 was $29.6 million, as compared to $36.3 million for the three months ended March 31, 2015. A summary of total revenue is outlined below:

Three Months Ended
March 31, Increase/(Decrease)
2016 2015
(in thousands)
Product sales $ 14,122 $ 3,056 $ 11,066
Royalty income 9,469 3,253 6,216
License and other income 6,000 30,000 (24,000 )
Total revenue $ 29,591 $ 36,309 $ (6,718 )

Product sales increased $11.1 million to $14.1 million in the first quarter of 2016 driven by $10.3 million in net product sales of Bendeka, 5% growth in Ryanodex net product sales to $1.9 million, $0.9 million in net sales of Docetaxel and increases in net sales of Diclofenac-misoprostol, offset by a decrease in Argatroban product sales to our commercial partners.

The $6.2 million increase in royalty income to $9.5 million was driven by the launch of Bendeka during the first quarter of 2016.

License and other income in the three months ended March 31, 2016 was $6 million compared with $30 million in the prior year quarter. This $6 million reflects revenue previously deferred from the 2010 sale of a non-core asset subject to a claw back provision, which has now expired.

Cost of revenue increased by $8.6 million to $14.5 million in the three months ended March 31, 2016 from $5.9 million in the three months ended March 31, 2015. This $8.6 million net increase resulted primarily from the cost of Bendeka product sales, Docetaxel and Diclofenac-misoprostol, offset by a decrease in cost of revenue for Ryanodex due to spoiled inventory, and lower Argatroban product sales.

Research and development expenses increased by $0.4 million to $6.7 million in the three months ended March 31, 2016, compared to $6.3 million in the prior year quarter. The increase is due primarily to the successful completion of the clinical treatment portion of the safety and efficacy study of Ryanodex for exertional heatstroke, investment in Kangio and other pipeline products, and higher R&D personnel costs offset by a decrease in spending related to bendamustine.

SG&A expenses were $11 million in the first quarter of 2016 compared to $4 million in the three months ended March 31, 2015. Personnel-related expenses accounted for the bulk of the $7 million increase and were due to overall expansion of the business.

Net loss for the first quarter was $896,000, or $0.06 per basic share and diluted share, compared to a net income of $19.7 million, or $1.38 per basic and $1.31 per diluted share in the three months ended March 31, 2015, as a result of the factors discussed above.

Liquidity

As of March 31, 2016, the Company had $78.3 million in cash and cash equivalents; $15 million in receivables due from Teva; $200.3 million in additional paid in ca

On May 9, 2016 Ironwood Pharmaceuticals, Inc. (NASDAQ: IRWD), a commercial biotechnology company, reported an update on its first quarter 2016 results and recent business activities (Press release, Ironwood Pharmaceuticals, MAY 9, 2016, View Source [SID:1234512137]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"In the first few months of 2016, Ironwood made significant progress building a top-performing commercial biotech company. We delivered strong operational performance, advanced a second program into Phase IIb trials, and executed a license agreement that leverages our strong commercial capabilities and puts us on track for at least five U.S. commercial product launches by 2020," said Peter Hecht, chief executive officer of Ironwood. "The quarter’s results also demonstrate continued strong LINZESS growth: more than 4.5 million prescriptions have now been filled by more than 1 million patients since launch, and market research has shown high physician and patient satisfaction with LINZESS as an effective and safe treatment option for adults suffering from IBS-C or CIC."

First Quarter 2016 and Recent Highlights

Irritable Bowel Syndrome with Constipation (IBS-C) / Chronic Idiopathic Constipation (CIC) Franchise

Ironwood estimates its IBS-C/CIC franchise, including LINZESS and linaclotide colonic release (if approved), which are jointly owned in the U.S. by Ironwood and Allergan with both companies sharing equally in any profits or losses, may represent a peak U.S. sales opportunity exceeding $2 billion, with additional global potential.

LINZESS. U.S. net sales, as provided by Allergan, were $137.1 million in the first quarter of 2016, a 44% increase compared to the first quarter of 2015.
Nearly 600,000 total LINZESS prescriptions were filled in the first quarter of 2016, a 30% increase compared to the first quarter of 2015, according to IMS Health.
Net profit for the LINZESS U.S. brand collaboration, including commercial and research and development (R&D) expenses, was $58.4 million in the first quarter of 2016.
LINZESS commercial margin was 55% in the first quarter of 2016, compared to 39% in the first quarter of 2015.
Ironwood and Allergan launched a new direct to consumer marketing campaign, and the companies increased LINZESS managed care coverage and expanded the entry into new market segments including long term care.
Ironwood and Allergan continue to expect to launch a 72 mcg dose of linaclotide in early 2017, if approved. The companies anticipate that the 72 mcg dose will accelerate physician prescribing of LINZESS within the large, heterogeneous adult CIC patient population.
Linaclotide Colonic Release. A Phase IIb clinical trial is enrolling patients, with data expected in the second half of 2016. This second-generation guanylate cyclase-C (GC-C) agonist product candidate has the potential to provide greater and faster abdominal pain relief in adult IBS-C patients and to expand the IBS-C and CIC market, if approved.
Refractory Gastroesophageal Reflux Disease (GERD) Franchise

IW-3718. Ironwood initiated a dose-ranging Phase IIb clinical trial with IW-3718, a wholly-owned asset, for the potential treatment of refractory GERD. Data from the Phase IIb trial are expected in 2017. If approved, Ironwood estimates peak sales for IW-3718 may exceed $2 billion.
Uncontrolled Gout Franchise

On April 26, Ironwood announced that it signed a licensing agreement with AstraZeneca for the exclusive U.S. rights to all products containing lesinurad. This includes FDA-approved ZURAMPIC (lesinurad 200mg tablets) as well as a fixed-dose combination of lesinurad and allopurinol, which AstraZeneca plans to submit for FDA regulatory review in the second half of 2016.

For as many as two million gout patients in the U.S., treatment with a xanthine oxidase inhibitor (XOI) such as allopurinol to decrease production of uric acid is not sufficient to achieve treatment goals. ZURAMPIC complements XOI therapy by increasing excretion of uric acid and is indicated for use in combination with an XOI for the treatment of hyperuricemia associated with uncontrolled gout. ZURAMPIC is not recommended for the treatment of asymptomatic hyperuricemia and should not be used as monotherapy.

The transaction is expected to close in the second quarter of 2016, and Ironwood expects to launch ZURAMPIC in the middle of the second half of 2016.

Vascular and Fibrotic Franchise

Ironwood is leveraging its pharmacologic expertise in guanylate cyclases to advance soluble guanylate cyclase (sGC) stimulators for the potential treatment of vascular and fibrotic diseases. Ironwood believes this opportunity has the potential to deliver multiple products, a number of which could generate peak sales exceeding $1 billion if approved. All vascular and fibrotic assets are wholly-owned by Ironwood. Highlights during the first quarter and recent period include:

IW-1701. Ironwood announced positive top-line results from a Phase Ia study of IW-1701 and is in the process of initiating a Phase Ib multiple ascending dose study, with topline data expected in the second half of 2016.
IW-1973. Ironwood is currently enrolling healthy volunteers in a Phase Ib clinical study with IW-1973 designed to assess its safety, tolerability, pharmacokinetic profile and pharmacodynamic effects. Data from this study are expected in the second half of 2016.
Data from pre-clinical and early clinical studies of these compounds are being presented at several scientific conferences this spring.
Ironwood expects to initiate multiple Phase II studies with its sGC stimulators this year.

Additional Programs

Diabetic Gastroparesis

IW-9179. Ironwood previously announced that top-line data from an exploratory Phase IIa clinical study indicated IW-9179 did not meaningfully reduce the severity of symptoms in patients with diabetic gastroparesis and it will discontinue development of IW-9179 for gastroparesis.

Global Collaborations and Partnerships

Ironwood’s strong U.S. commercial organization successfully introduced LINZESS to the market with its partner Allergan and expects to commercialize multiple important products in the U.S. over time. Ironwood expects to out-license ex-U.S. commercialization rights to its pipeline product candidates. Highlights during the first quarter and recent period include:

Astellas Pharma Inc. filed for approval with the Ministry of Health, Labor and Welfare to market linaclotide in Japan for IBS-C in adult patients, which resulted in Ironwood earning a $15 million development milestone payment, which was received in the first quarter.
Ironwood and AstraZeneca AB filed for approval with the China Food and Drug Administration to market linaclotide in China for the treatment of adult patients with IBS-C.
Ironwood continued co-promoting Allergan’s VIBERZI (eluxadoline) for adults suffering from IBS with diarrhea (IBS-D) and Exact Sciences’ Cologuard noninvasive stool DNA screening test for colorectal cancer, in the U.S. Both partnerships represent productive and efficient utilization of Ironwood’s commercial capabilities and continue to generate incremental revenues.
Corporate and Financials

Collaborative Arrangements Revenue
Collaborative arrangements revenue was $66.0 million in the first quarter of 2016 compared to $28.9 million in the first quarter of 2015. Revenue primarily consisted of $46.6 million in revenue associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S., compared to $25.1 million in the first quarter of 2015.
Ironwood recognized $12.9 million in revenue of the $15.0 million milestone payment from Astellas during the first quarter of 2016.
Operating Expenses
Operating expenses were $68.0 million in the first quarter of 2016 as compared to $57.0 million in the first quarter of 2015. Operating expenses in the first quarter of 2016 consisted of $31.8 million in R&D expenses, and $36.2 million in selling, general and administrative (SG&A) expenses. Non-cash share-based compensation expenses recorded in R&D and SG&A expenses in the first quarter of 2016 were $2.5 million and $4.3 million, respectively.
Other Expense
Interest Expense. Net interest expense was $9.7 million in the first quarter of 2016, in connection with the company’s $175 million debt financing executed in January 2013 and the approximately $336 million convertible debt financing executed in June 2015. Interest expense recorded in the first quarter of 2016 includes $6.3 million in cash expense and $3.6 million in non-cash expense.
Gain/Loss on Derivatives. Ironwood records a gain/loss on derivatives related to the change in fair value of the convertible note hedges and note hedge warrants issued in connection with the convertible debt financing in June 2015. A loss on derivatives of $1.6 million was recorded in the first quarter of 2016.
Net Loss
GAAP net loss was $13.3 million, or $0.09 per share, in the first quarter of 2016, as compared to $33.2 million, or $0.24 per share, in the first quarter of 2015. Non-GAAP net loss excludes the impact of mark-to-market adjustments on the derivatives related to Ironwood’s convertible debt. Non-GAAP net loss was $11.7 million, or $0.08 per share, in the first quarter of 2016, as compared to $33.2 million, or $0.24 per share, in the first quarter of 2015. See Non-GAAP Financial Measures below.
Cash Position
Ironwood ended the first quarter of 2016 with $434 million of cash, cash equivalents and available-for-sale securities, a decrease of $5 million from the end of the fourth quarter of 2015. Ironwood generated $0.2 million in cash from operating activities during the first quarter of 2016. In contrast, in the first quarter of 2015, Ironwood used $36 million of cash for operations.
2016 Financial Guidance
In 2016, Ironwood expects:

Use of less than $70 million in cash for operations in 2016, revised as of April 26, 2016, at the time of the lesinurad deal announcement, from less than $60 million as previously guided.
Combined Allergan and Ironwood total 2016 marketing and sales expenses for LINZESS to be in the range of $230 million to $260 million.
On its second quarter 2016 investor update, following the closing of the lesinurad transaction, Ironwood expects to update its guidance for total annual operating expenses for 2016, including both R&D and SG&A expenses.

Non-GAAP Financial Measures

The company presents non-GAAP net loss and non-GAAP net loss per share to exclude the impact of net gains and losses on the derivatives related to our convertible notes that are required to be marked-to-market. These gains and losses may be highly variable, difficult to predict and of a size that could have a substantial impact on the company’s reported results of operations in any given period. Management believes this non-GAAP information is useful for investors, taken in conjunction with Ironwood’s GAAP financial statements, because it provides greater transparency and period-over-period comparability with respect to Ironwood’s operating performance. These measures are also used by management to assess the performance of the business. Investors should consider these non-GAAP measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. For a reconciliation of these non-GAAP financial measures to the most comparable GAAP measures, please refer to the table at the end of this press release.