On July 30, 2015 Threshold Pharmaceuticals, Inc. (NASDAQ: THLD) reported financial results for the second quarter 2015 (Filing, 8-K, Threshold Pharmaceuticals, JUL 30, 2015, View Source [SID:1234506757]). Revenue for the second quarter ended June 30, 2015 was $3.7 million. The operating loss for the second quarter ended June 30, 2015 was $8.9 million. The net loss for the second quarter ended June 30, 2015 was $8.3 million, which included the operating loss of $8.9 million and non-cash income of $0.6 million related to the changes in fair value of the Company’s outstanding warrants and was classified as other income (expense). As of June 30, 2015, Threshold had $67.0 million in cash, cash equivalents and marketable securities, with no debt outstanding.

"We are pleased with progress being made in the development programs for both of our product candidates, evofosfamide and tarloxotinib," said Barry Selick, Ph.D., Chief Executive Officer of Threshold. "We expect to announce top-line results from the two pivotal Phase 3 clinical trials of evofosfamide in patients with advanced soft tissue sarcoma and in patients with advanced pancreatic cancer (MAESTRO) around the end of this year. We are initiating two proof-of-concept Phase 2 clinical trials of tarloxotinib this year in patients whom we believe may benefit from treatment with our proprietary and novel hypoxia-activated EGFR tyrosine kinase inhibitor."

Second Quarter 2015 Financial and Operational Results

Revenue of $3.7 million was recognized for both the second quarter of 2015 and 2014. Revenue is related to the amortization of the aggregate of $110 million in upfront and milestone payments earned in 2013 and 2012 from Threshold’s collaboration with Merck KGaA, Darmstadt, Germany. The revenue from the upfront and milestone payments earned under the agreement is being amortized over the relevant performance period, rather than being immediately recognized when the upfront and milestone payments are earned or received.

The net loss for the second quarter of 2015 was $8.3 million compared to a net loss of $0.8 million for the second quarter of 2014. Included in the net loss for the second quarter of 2015 was an operating loss of $8.9 million and non-cash income of $0.6 million compared to an operating loss of $7.5 million and non-cash income of $6.7 million included in the net loss for the second quarter of 2014. The non-cash income is related to the change in fair value of the Company’s outstanding warrants and was classified as other income (expense).

Research and development expenses were $10.1 million for the second quarter of 2015 compared to $8.7 million for the second quarter of 2014. The increase in research and development expenses was due primarily to a $1.2 million increase in clinical development expenses, net of reimbursement from Merck KGaA, Darmstadt, Germany related to their 70% share of total development expenses for evofosfamide (previously known as TH-302).

General and administrative expenses were $2.5 million for both the second quarter of 2015 and 2014.

Non-cash stock-based compensation expense included in total operating expenses was $1.9 million for the second quarter of 2015 versus $1.5 million for the second quarter of 2014. The increase in stock-based compensation expense was due to the amortization of a greater number of options with higher fair values.

As of June 30, 2015 and March 31, 2015, Threshold had $67.0 million and $83.1 million in cash, cash equivalents and marketable securities, respectively. The net decrease of $16.1 million in cash, cash equivalents and marketable securities during the second quarter of 2015 was primarily due to the Company’s operating cash requirements for the second quarter of 2015.

Second Quarter and Recent Key Achievements

Evofosfamide

In May, Threshold announced that the U.S. Food and Drug Administration (FDA) granted Fast Track designation to the Company’s partner Merck KGaA, Darmstadt, Germany, for the development of evofosfamide (TH-302), administered in combination with gemcitabine, for the treatment of previously untreated patients with locally advanced unresectable or metastatic pancreatic cancer. This is the second Fast Track designation for evofosfamide, the first having been granted to Threshold in November 2014 for the development of evofosfamide in combination with doxorubicin for the treatment of patients with locally advanced or metastatic soft tissue sarcoma.

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Also in May, Threshold presented data from the Phase 2 component of an ongoing Phase 1/2 trial of evofosfamide in combination with the proteasome inhibitor Velcade (bortezomib) and low-dose dexamethasone ("EBorD") in patients with relapsed or refractory multiple myeloma at the annual meeting of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) (Abstract 8579). A clinical benefit rate of 29% (one complete response, two partial responses, and one minimal response) was observed in 4 of 14 patients treated at the recommended Phase 2 dose of evofosfamide (340 mg/m2) in EBorD. These patients had already received multiple types of treatment prior to enrollment including a median of 3 prior bortezomib-containing regimens. The most common adverse events were thrombocytopenia and anemia and no patients discontinued treatment due to an adverse event.

In April, preclinical data evaluating the potential use of evofosfamide in a variety of tumor types were presented by Threshold and Merck KGaA, Darmstadt, Germany, at the annual meeting of the American Association for Cancer Research (AACR) (Free AACR Whitepaper) (Abstract Nos. 2424, 2603, 3867, 5271, and 5333).

Tarloxotinib bromide* ("tarloxotinib")

In April, data on tarloxotinib (TH-4000; previously referred to as PR610 or Hypoxin), Threshold’s proprietary, hypoxia-activated irreversible epidermal growth factor receptor (EGFR) tyrosine kinase inhibitor, were presented in collaboration with the molecule’s co-inventors from The University of Auckland at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) annual meeting (Abstract 5358). The Company believes the data presented support its planned Phase 2 proof-of-concept clinical trials of tarloxotinib in patients with EGFR-positive, T790M-negative NSCLC after conventional EGFR-TKI therapy has failed as well as in patients with recurrent or metastatic squamous cell carcinoma of the head and neck or skin.

Clinical Development Outlook for Threshold- and Merck KGaA, Darmstadt, Germany-Sponsored Trials of Evofosfamide

The development plan for evofosfamide is designed to investigate its safety and efficacy across a broad range of solid tumors and hematologic malignancies. Evofosfamide is being developed in therapeutic areas supported by preclinical and clinical data and where there is high unmet need for new anti-cancer agents. To date, evofosfamide has been evaluated in more than 1,500 patients with cancer. Threshold anticipates the following development activities related to Threshold- and Merck KGaA, Darmstadt, Germany-sponsored clinical trials for evofosfamide in 2015:

· Continue to efficiently execute the two Phase 3 clinical trials of evofosfamide to allow for timely data analyses and to prepare for the potential submission of marketing applications, assuming the data from the trials are supportive;
· Continue enrollment in the Phase 2 clinical trial of evofosfamide designed to support registration for the treatment of patients with non-squamous non-small cell lung cancer;
· Complete enrollment in the Phase 2 clinical trial of evofosfamide in combination with bortezomib (Velcade) and low-dose dexamethasone in patients with relapsed or refractory multiple myeloma; and
· Threshold is in the process of closing the Phase 2 clinical trial of evofosfamide in patients with melanoma due to a slower than anticipated enrollment rate in light of the evolving treatment landscape and new therapeutic options for patients with melanoma since the trial began.

About Evofosfamide

Evofosfamide is an investigational hypoxia-activated prodrug that is designed to be preferentially activated under severe tumor hypoxic conditions, a feature of many solid tumors. Areas of low oxygen levels (hypoxia) in solid tumors are due to insufficient blood vessel supply. Similarly, the bone marrow of patients with hematological malignancies has also been shown, in some cases, to be severely hypoxic.

Evofosfamide is currently in two Phase 3 trials, both of which are fully recruited: one in combination with doxorubicin versus doxorubicin alone in patients with locally advanced unresectable or metastatic soft tissue sarcoma (STS) (the TH-CR-406 trial), and the other in combination with gemcitabine versus gemcitabine and placebo in patients with locally advanced unresectable or metastatic pancreatic cancer (the MAESTRO trial). Both Phase 3 trials are being conducted under Special Protocol Assessment (SPA) agreements with the FDA. The FDA and the European Commission have granted evofosfamide Orphan Drug designation for the treatment of STS and pancreatic cancer. The FDA has also granted Fast Track designation for evofosfamide for both STS and pancreatic cancer. Evofosfamide is also being investigated in a Phase 2 trial designed to support registration for the treatment of non-squamous non-small cell lung cancer, and in earlier-stage clinical trials of other solid tumors and hematological malignancies.

Threshold has a global license and co-development agreement for evofosfamide with Merck KGaA, Darmstadt, Germany, which includes an option for Threshold to co-commercialize in the U.S.

About Tarloxotinib Bromide

Tarloxotinib bromide, or "tarloxotinib", (TH-4000) is a hypoxia-activated, covalent (irreversible) epidermal growth factor receptor tyrosine kinase inhibitor (EGFR-TKI) that targets the activating mutations of EGFR (L858R and Del19) and wild-type, or "normal", EGFR. Tarloxotinib is designed as a prodrug to selectively release its EGFR-TKI upon encountering severe tumor hypoxic conditions, a feature of many solid tumors. Accordingly, it has the potential to effectively shut down aberrant wild-type and mutant EGFR signaling in a tumor-selective manner, thus potentially avoiding or reducing the toxic side effects associated with currently available EGFR-TKIs and systemic wild-type EGFR inhibition. Threshold expects to initiate two Phase 2 proof-of-concept trials with tarloxotinib in 2015: one in patients with mutant EGFR-positive, T790M-negative advanced non-small cell lung cancer progressing on an EGFR-TKI, and the other in patients with recurrent or metastatic squamous cell carcinoma of the head and neck or skin. Threshold licensed exclusive worldwide rights to tarloxotinib from the University of Auckland in September 2014.

(Filing, 10-Q, MediciNova, JUL 30, 2015, View Source [SID:1234506775])

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On July 30, 2015 Theragenics Corporation, a medical device company serving the cancer treatment and surgical product markets, reported that it has reached an agreement with Advanced Radiation Therapy, LLC to distribute the AccuBoost technology for the treatment of early stage breast cancer (Press release, Theragenics, JUL 30, 2015, View Source [SID:1234506758]). The AccuBoost technology, developed by Advanced Radiation Therapy of Tyngsboro, MA, is used to provide a radiation "boost" following a lumpectomy. A radiation boost to the lumpectomy cavity margin as part of breast conservation therapy is the standard of care to minimize cancer recurrence. AccuBoost is also used as a non-invasive option for accelerated partial breast irradiation (APBI), a form of primary radiation therapy following lumpectomy. Under the agreement Theragenics is the exclusive third-party distributor of AccuBoost in the United States.

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AccuBoost, a real time mammography-guided radiation therapy, has been used to treat over 5,000 women since 2007. The technology’s real-time mammographic imaging provides advantages over other methods of delivering a radiation boost by allowing the physician to visualize the tumor bed and define the appropriate margin to target as the treatment is given. The ability to precisely target the radiation dose minimizes exposure to surrounding tissue and organs such as the heart and lungs. Use of AccuBoost may also result in improved cosmetic outcomes as compared with other methods of delivering a radiation boost1,2.

"This is an exciting step in our history," stated Frank J. Tarallo, Chief Executive Officer of Theragenics Corporation. "For over 30 years we have supported the radiation oncology community with our brachytherapy products for the treatment of men with early stage prostate cancer, and we will continue to do so. AccuBoost allows us to utilize our expertise to provide an excellent brachytherapy treatment option for women with early stage breast cancer. Throughout our history our message to men with prostate cancer has been to know the treatment options. Our message to women facing breast cancer will be identical. Indeed, the mission of our brachytherapy business has been to cure one patient of cancer with each and every order that we ship. AccuBoost underscores our mission of supporting the cure of cancer, and expands on our longtime commitment to the radiation oncology community."

Mr. Tarallo continued, "AccuBoost is a unique technology developed by Advanced Radiation Therapy, an innovative company. Our brachytherapy expertise complements their technical system expertise perfectly. Our established channels in the radiation oncology market segment will make AccuBoost more widely available and expand treatment choices, a plus for breast cancer patients."

Piran Sioshansi, Chief Executive Officer of Advanced Radiation Therapy, remarked, "AccuBoost has a proven track record of effective treatment of breast cancer. Theragenics provides expertise in the sales and marketing of radioactive devices and an extensive brachytherapy distribution channel. Theragenics’ ability to grow AccuBoost utilization and expand access to the technology will be well received by both patients and health care providers."

On July 30, 2015 Baxalta Incorporated (NYSE:BXLT) reported revenues for the second quarter and first half of 2015, which exceeded expectations, and provided its financial outlook for the third quarter and second half of 2015 (Filing, 8-K, Baxalta, JUL 30, 2015, View Source [SID:1234506759]). The company continues to bolster its portfolio with acquisitions and collaborations focused on rare and orphan diseases, and advanced its product pipeline with the achievement of significant milestones. Baxalta launched as an independent company, listed on the New York Stock Exchange, on July 1, 2015.

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"The Baxalta team is successfully executing on our strategies to build an independent, global biopharmaceutical company focused on delivering innovation that provides patients with better treatment options for challenging chronic and rare diseases," said Ludwig Hantson, chief executive officer and president, Baxalta. "It is an exciting time for Baxalta. Our strong financial performance, increasing depth and breadth across the portfolio, progress toward near-term launches, and compelling growth prospects are differentiating our company."

Results for the Second Quarter of 2015

During the second quarter, Baxalta generated worldwide pro forma sales of $1.47 billion, reflecting growth of 7 percent excluding the impact of foreign currency. Pro forma sales include international sales of $40 million, which were comparable to the prior year, associated with the company’s manufacturing and supply agreement (MSA) for certain biosurgery products for Baxter International. On a GAAP (Generally Accepted Accounting Principles) basis, Baxalta’s worldwide revenues of $1.43 billion declined 2 percent from the prior-year period.

Within the United States, sales of $775 million rose 6 percent, and international sales of $654 million declined 9 percent. On a pro forma basis, international sales of $694 million declined 8 percent. Excluding foreign currency, international pro forma sales increased 9 percent.

Second quarter sales performance was the result of strong momentum and balanced growth across the company’s leading hematology and immunology businesses. Hematology revenues, excluding the impact of foreign currency, grew 6 percent in the second quarter driven by robust global demand for ADVATE [Antihemophilic Factor (Recombinant)], a treatment for hemophilia A, and double-digit growth of FEIBA [Anti-Inhibitor Coagulant Complex], an inhibitor treatment. Newly launched products also contributed to growth, such as RIXUBIS [Coagulation Factor IX (Recombinant)] for the treatment of hemophilia B, and OBIZUR [Antihemophilic Factor (Recombinant), Porcine Sequence], for the treatment of acquired hemophilia A.

Pro forma immunology sales, excluding the impact of foreign currency, advanced 10 percent driven by demand for immunoglobulin therapies and continued launch success of HYQVIA [Immune Globulin Infusion 10% (Human) with Recombinant Human Hyaluronidase]. HYQVIA is the only once-monthly subcutaneous treatment available for adults with primary immunodeficiency, which is achieving rapid acceptance in the United States.

Results for the First Six Months of 2015
Baxalta generated worldwide pro forma sales for the first six months of 2015 of $2.87 billion, reflecting growth of 8 percent excluding the impact of foreign currency. Excluding the impact of foreign currency, hematology revenues grew 5 percent and pro forma immunology sales advanced 11 percent. On a GAAP basis, Baxalta’s worldwide revenues for the first six months of 2015 were $2.79 billion, which does not reflect international pro forma MSA revenues of $82 million for the period, and were comparable to the prior year.

Revenues within the United States of $1.53 billion rose 6 percent, and international sales of $1.26 million declined 6 percent. On a pro forma basis, international sales of $1.34 billion declined 6 percent. Excluding foreign currency, international pro forma sales increased 9 percent versus the first six months of the prior year.
Significant Progress with Cross-Portfolio Pipeline and Commercial Milestones
"Baxalta has a rich pipeline, reflecting meaningful innovation with promising late-stage assets, novel mechanisms, and disruptive technologies," added Hantson. "We continue to achieve a number of significant pipeline and portfolio milestones, which positions the company to drive enhanced growth and value for patients and shareholders."

Recent highlights include:

• Completion of the ONCASPAR (pegaspargase) portfolio acquisition from Sigma-Tau Finanziaria S.p.A., further accelerating Baxalta’s innovation capabilities and commercial presence in growing oncology markets. The acquisition includes ONCASPAR, an important marketed biologic treatment for acute lymphocytic leukemia (ALL), the investigational biologic calaspargase pegol, and an established oncology infrastructure with clinical and sales resources.

• Presentations at the 2015 International Society on Thrombosis and Haemostasis (ISTH) Congress, during which the company:

- Introduced ADYNOVATE as the marketed brand name for BAX 855, an investigational, extended half-life recombinant factor VIII (rFVIII) treatment based on ADVATE. ADYNOVATE is currently under regulatory review by the U.S. Food and Drug Administration (FDA) as well as Japan’s Ministry of Health.

- Announced continued progress on the Phase I/II open-label study on BAX 335, an investigational factor IX gene therapy treatment for hemophilia B.

- Presented additional data from the Phase III clinical trial of BAX 111, which will be marketed in the U.S. as VONVENDI. VONVENDI is currently under regulatory review in the U.S., and if approved, will be the first highly-purified recombinant von Willebrand Factor (rVWF) for patients with von Willebrand disease.

• Receipt of a positive opinion on OBIZUR from the European Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA). OBIZUR is a treatment for bleeding episodes in adult patients with acquired hemophilia A caused by antibodies to factor VIII, a very rare and potentially life-threatening acute bleeding disorder. Marketing authorization from the European Commission is anticipated later this year.

• Submission of a European marketing authorization application (MAA) for approval of the investigational 20% concentration subcutaneous immune globulin (IGSC) treatment for primary immunodeficiencies. As Baxalta expands its immunoglobulin portfolio to address patient needs, the higher potency IG treatment is intended to offer faster infusions with less volume. The company expects to file for U.S. approval later this year.

• Progress in Baxalta’s contract fractionation agreement with Stichting Sanquin Bloedvoorziening (Sanquin Blood Supply Foundation) to enhance supply and support growth in global demand for plasma-based therapies. Sanquin has submitted the production line for approval in Europe, which will provide additional manufacturing flexibility.

• Submission of a European MAA for MM-398 (nal-IRI), for the treatment of metastatic pancreatic cancer for patients who have previously been treated with gemcitabine-based therapy. Baxalta’s U.S. partner Merrimack Pharmaceuticals submitted a new drug application (NDA) for MM-398 to the FDA and it has been granted Priority Review status.

• Presentation of additional data on pacritinib with CTI BioPharma during the 51st Annual Meeting of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper). The presentation included primary and secondary endpoints from PERSIST-1, a randomized, controlled Phase III registration clinical trial of pacritinib, an oral kinase inhibitor with specificity for JAK2 and FLT3 for the treatment of patients with myelofibrosis.

• Formation of Vitesse Biologics, LLC, a unique collaboration model among Baxalta Ventures, Mayo Clinic, and Velocity Pharmaceutical Development to develop antibody and protein-based therapeutics in the areas of hematology, immunology, and oncology. Each organization will provide recognized expertise to enhance target selection and optimization, expression, and product development processes. Baxalta will be involved in the early stages of development and has an exclusive option to acquire the candidates identified by Vitesse following the completion of Phase I trials.

Financial Outlook for Third Quarter and Second Half of 2015

Baxalta today provided its financial outlook for the third quarter and second half of 2015. For the third quarter of 2015, excluding the impact of foreign currency, the company expects pro forma sales growth of 8 to 10 percent. Including the impact of foreign currency, the company expects reported pro forma sales to be comparable to the prior year. Baxalta also expects adjusted earnings, before special items, of $0.48 to $0.50 per diluted share.

For the second half of 2015, Baxalta expects pro forma sales growth, excluding the impact of foreign currency, of 5 to 6 percent. Including the impact of foreign currency, the company expects reported pro forma sales to decline 2 to 3 percent. Also for the second half of the year, Baxalta expects adjusted earnings, before special items, of $1.02 to $1.04 per diluted share.
The company’s guidance for earnings in the third quarter of 2015 excludes approximately $0.01 per diluted share of projected intangible asset amortization expense. The company’s adjusted earnings guidance for the second half excludes $0.02 per diluted share of projected intangible asset amortization expense. Reconciling for the inclusion of these items results in expected GAAP earnings of $0.47 to $0.49 per diluted share for the third quarter of 2015, and earnings of $1.00 to $1.02 per diluted share for the second half of 2015.

(Filing, 10-Q, Seattle Genetics, JUL 30, 2015, View Source [SID:1234506783])

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