On October 31, 2018 United Therapeutics Corporation (NASDAQ: UTHR) reported its financial results for the quarter ended September 30, 2018 (Press release, United Therapeutics, OCT 31, 2018, View Source [SID1234530448]).

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"We are pleased to see continued growth in the number of U.S. patients treated with our prostacyclin product franchise during the quarter," said Martine Rothblatt, Ph.D., Chairman and Chief Executive Officer of United Therapeutics. "We’ve been busy bringing in exceptional new pipeline opportunities and advancing our six Phase III clinical trials."

Third Quarter Highlights

Announced that our FREEDOM-EV study of Orenitram met its primary endpoint.
Settled patent litigation with Watson Laboratories, Inc. (Watson), relating to Tyvaso. Under the terms of the settlement, Watson is permitted to launch a generic version of Tyvaso in the U.S. beginning on January 1, 2026 (or earlier under certain circumstances).
Completed the acquisition of SteadyMed Ltd. and its drug product candidate Trevyent, which is a development-stage drug-device combination product that combines SteadyMed’s PatchPump technology with treprostinil to treat pulmonary arterial hypertension (PAH). We anticipate resubmitting the Trevyent NDA to the FDA during the first half of 2019.
In-licensed MannKind Corp.’s Treprostinil Technosphere, a phase III-ready development-stage drug-device combination product that combines MannKind’s dry inhalation technology with treprostinil for the treatment of PAH.
In-licensed the U.S. and Canadian rights to Samumed LLC’s SM04646, a phase I development-stage oral Wnt pathway inhibitor, to treat idiopathic pulmonary fibrosis.
Completed enrollment of the DISTINCT study of dinutuximab in patients with small cell lung cancer (n=472).
Financial Results for the Three Months Ended September 30, 2018 compared to the Three Months Ended September 30, 2017

Revenues for the three months ended September 30, 2018 decreased by $32.8 million as compared to the same period in 2017. Remodulin net product sales decreased by $33.7 million due to a $36.5 million decrease in international net product sales, partially offset by a $2.8 million increase in U.S. net product sales. International Remodulin net product sales are lower relative to 2017 due to $23.7 million of net product sales recognized in the third quarter of 2017 related to a one-time purchase of Remodulin by an international distributor, in connection with the transfer of additional regulatory and commercial responsibilities to that distributor. In addition, our international net product sales decreased due to lower quantities shipped to the aforementioned distributor, after taking the one-time purchase into account. Tyvaso net product sales increased by $18.9 million due to the comparative impact of an additional one-time $12.2 million liability for estimated Medicaid rebates recorded in the third quarter of 2017 and a price increase implemented in January 2018. Adcirca net product sales decreased by $25.2 million due to a decrease in bottles sold, due in large part to the launch of a generic version of Adcirca in August 2018, and an approximate $16.4 million increase in our estimated allowance for product returns, partially offset by a price increase implemented by Lilly. Unituxin net product sales increased by $5.9 million due to an increase in the number of vials sold and a price increase implemented in December 2017.

Cost of product sales, excluding share-based compensation. The increase in cost of product sales of $28.2 million for the three months ended September 30, 2018, as compared to the same period in 2017, was primarily due to a $26.8 million increase in the royalty expense for Adcirca. As a result of an amendment to our license agreement with Lilly, effective December 1, 2017, our royalty rate on net product sales of Adcirca increased from five percent to an effective rate of approximately 42.5 percent.

Research and development expense, excluding share-based compensation. The increase in research and development expense of $30.8 million for the three months ended September 30, 2018, as compared to the same period in 2017, was driven by the continued investment in our product pipeline to treat cardiopulmonary diseases and cancer as well as our programs in regenerative medicine and organ manufacturing.

The increase in share-based compensation expense of $75.4 million for the three months ended September 30, 2018, as compared to the same period in 2017, was primarily due to: (1) a $70.2 million increase in STAP expense related to an increase in our stock price during the three months ended September 30, 2018, as compared to a decrease in our stock price during the same period in 2017; and (2) a $3.5 million increase in stock option expense due to additional awards granted and outstanding in 2018.

Impairment of Investment in a Privately-Held Company

During the quarter ended September 30, 2018, one of the privately-held companies in which we have invested experienced an event triggering an impairment analysis to evaluate the recoverability of our investment. We determined that the current fair value of our investment was lower than its carrying value, resulting in an impairment charge of $12.4 million. As of September 30, 2018, the adjusted carrying value of our investment in this company is $41.1 million. During the three-and nine-month periods ended September 30, 2018, we recorded $12.4 million of impairment charges related to our investments in privately-held companies. During the three-and nine-month periods ended September 30, 2017, we recorded $3.1 million and $49.6 million, respectively, of impairment charges related to our investments in privately-held companies.

Income Tax Expense

The provision for income taxes was $33.6 million for the three months ended September 30, 2018, as compared to $44.4 million for the same period in 2017. The provision for income taxes is based on an estimated annual effective tax rate (ETR) for the entire year. The estimated annual ETR is subject to adjustment in subsequent quarterly periods if components used to calculate the estimated annual ETR are updated or revised. Our actual ETR as of September 30, 2018 and September 30, 2017 was approximately 21 percent and approximately 37 percent, respectively. Our actual ETR for the nine months ended September 30, 2018 decreased as compared to the same period in 2017 due to the impacts of The Tax Cuts and Jobs Act (Tax Reform), the nondeductible portion of an accrual in the second quarter of 2017 in connection with a civil settlement with the Department of Justice, and a decrease in impairment charges not currently meeting the criteria for tax deductibility.

Non-GAAP Earnings

Non-GAAP earnings is defined as net income, adjusted for: (1) share-based compensation expense (including expenses relating to stock options, restricted stock units, share tracking awards, and our employee stock purchase plan); (2) loss contingency; (3) impairment of investment in privately-held company; (4) license fees; and (5) tax impact on non-GAAP earnings adjustments.

We calculated the total tax impact of non-discrete quarterly non-GAAP earnings adjustments based on our estimated annual effective tax rates, before considering discrete items, of approximately 22 percent and approximately 33 percent for the quarters ended September 30, 2018 and September 30, 2017, respectively.

As of September 30, 2018, these non-GAAP earnings adjustments did not meet the criteria for tax deductibility.

The tax benefit for the three months ended September 30, 2017 includes $57.0 million of benefit for the estimated loss contingency recognized during the second quarter of 2017 relating to the DOJ investigation of our support of 501(c)(3) organizations that provide financial assistance to patients.

Conference Call

We will host a half-hour teleconference on Wednesday, October 31, 2018, at 9:00 a.m. Eastern Time. The teleconference is accessible by dialing 1-877-351-5881, with international callers dialing 1-970-315-0533. A rebroadcast of the teleconference will be available for one week by dialing 1-855-859-2056, with international callers dialing 1-404-537-3406, and using access code: 4179147.

This teleconference will also be webcast and can be accessed via our website at View Source

On October 31, 2018 TRACON Pharmaceuticals (NASDAQ:TCON), a clinical stage biopharmaceutical company focused on the development and commercialization of novel targeted therapeutics for cancer and wet age-related macular degeneration, reported that it will report its third quarter 2018 financial and operating results after the close of U.S. financial markets on Wednesday, November 7, 2018 (Press release, Tracon Pharmaceuticals, OCT 31, 2018, View Source [SID1234530548]). In addition, management will host a conference call to provide an update on corporate activities and discuss the quarterly financial results.

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Conference call and webcast:
Date: November 7, 2018
Time: 4:30 pm Eastern Time (1:30 pm Pacific Time)
Dial-in: (855) 779-9066 (Domestic) or (631) 485-4859 (International)
Passcode: 6170289
Via web: www.traconpharma.com; "Events and Presentations" section within the "Investors" section
A replay of the webcast will be available for 60 days on the website.

On October 30, 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 third quarter ended September 30, 2018.

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"2018 is proving to be a pivotal year for Acceleron, and with several key milestones approaching, we are well-positioned for future growth. Along with our global collaboration partner, Celgene, we expect to share results from the MEDALIST and BELIEVE Phase 3 trials of luspatercept with the global hematology community at the upcoming ASH (Free ASH Whitepaper) meeting in December. With the recent initiation of the COMMANDS Phase 3 trial, we now have ongoing clinical trials with luspatercept in three additional patient populations. We remain committed to further exploring luspatercept’s potential to be a platform treatment for a range of anemias," said Habib Dable, President and Chief Executive Officer of Acceleron. "Our neuromuscular and pulmonary teams have done a tremendous job in getting multiple Phase 2 trials underway for ACE-083 in patients with FSHD and CMT, and sotatercept in patients with PAH. Both programs will have multiple important inflection points over the next two years."

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 address a 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 trial results in patients with lower-risk MDS and transfusion-dependent beta-thalassemia, respectively, are expected to be presented at the 60th ASH (Free ASH Whitepaper) Annual Meeting and Exposition in December 2018.

Acceleron and Celgene plan to submit regulatory applications for both MDS and beta-thalassemia in the United States and Europe in the first half of 2019.

The COMMANDS Phase 3 trial in patients with lower-risk MDS who are treatment naïve has been initiated.

Enrollment is ongoing in the BEYOND Phase 2 trial in patients with non-transfusion-dependent beta-thalassemia as well as the Phase 2 trial in patients with MF.

ACE-083:

Facioscapulohumeral Muscular Dystrophy (FSHD) and Charcot-Marie-Tooth Disease (CMT)
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 involved in muscle formation.

Final results from Part 1 of each Phase 2 trial with ACE-083 in patients with FSHD and CMT, respectively, were presented at the 2018 World Muscle Society (WMS) Annual Meeting.

Enrollment is ongoing in Part 2 of the Phase 2 FSHD trial, with preliminary results expected in the second half of 2019.

Enrollment is ongoing in Part 2 of the Phase 2 CMT trial, with preliminary results expected by the end of 2019.

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 involved in muscle formation.

Enrollment is 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 that control the BMPRII signaling pathway, which is 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.

Multiple preclinical abstracts for sotatercept in PAH have been accepted for presentation at the American Heart Association Scientific Sessions on November 10-12, 2018.

On November 16, 2018, the Company will host a PAH Research and Development Deep Dive event in New York City.

Enrollment is ongoing in 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 study, called SPECTRA, in Q1 2019 to provide further understanding of sotatercept’s impact on the disease.

Financial Results

Cash position – Cash, cash equivalents and investments as of September 30, 2018 were $319.8 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 third quarter was $3.3 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 third quarter were $33.4 million. This includes R&D expenses of $24.7 million and G&A expenses of $8.7 million.

Net loss – The Company’s net loss for the third quarter ended September 30, 2018 was $29.0 million.
Conference Call and Webcast
The Company will host a webcast and conference call to discuss its third quarter financial results for 2018 and provide an update on recent corporate activities on October 30, 2018, at 4:30 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 Third Quarter 2018 Earnings Call."

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

On October 30, 2018 Exact Sciences Corp. (Nasdaq: EXAS) reported that the company generated revenue of $118.3 million and screened approximately 241,000 people with Cologuard during the quarter ended September 30, 2018 (Press release, Exact Sciences, OCT 30, 2018, View Source [SID1234530394]). Third-quarter 2018 revenue and Cologuard test volume grew by 63 percent and 49 percent, respectively, from the same period of 2017.

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"The Exact Sciences team delivered another strong quarter, highlighted by significantly increased patient access to Cologuard with no out-of-pocket cost and continued progress toward our 2018 priorities," said Kevin Conroy, chairman and CEO of Exact Sciences. "We are enthusiastic about our partnership with Pfizer and launched Cologuard to their internal medicine team in early October. We look forward to working with such a tremendous partner in the fight against colon cancer."

Third-Quarter 2018 Financial Results

For the three-month period ended September 30, 2018, as compared to the same period of 2017 (where applicable):

Revenue was $118.3 million, an increase of 63 percent, and test volume was 241,000, an increase of 49 percent
Average recognized revenue per test was $492, an improvement of 9 percent
Average cost per test was $125, an improvement of 3 percent
Gross margin was 75 percent, an increase of 320 basis points
Operating expenses were $129.2 million, an increase of 61 percent
Net loss was $45.4 million or $0.37 per share, compared to $26.9 million or $0.23 per share
Non-cash interest expense related to convertible debt was $8.4 million, or $0.07 per share
Cash utilization was $36.9 million, compared to $21.7 million
Cash, cash equivalents and marketable securities were $1.2 billion at the end of the quarter
More than 11,000 healthcare providers ordered their first Cologuard test during the third quarter, and nearly 132,000 have ordered since the test was launched
2018 Outlook

The company anticipates revenue of $435-$440 million for 2018, an increase from prior guidance of $420-$430 million
The company’s guidance for revenue is a forward-looking statement. It is subject to various risks and uncertainties that could cause the company’s actual results to differ materially from the anticipated targets. There can be no assurance the company will meet these financial projections. See the cautionary information about forward-looking statements in the "Safe Harbor Statement" section of this press release.

Third-Quarter Conference Call & Webcast

Company management will host a conference call and webcast on Tuesday, Oct. 30, 2018, at 5 p.m. ET to discuss third-quarter 2018 results. The webcast will be available at www.exactsciences.com. Domestic callers should dial 877-201-0168 and international callers should dial +1-647-788-4901.

An archive of the webcast will be available at www.exactsciences.com. A replay of the conference call will be available by calling 800-585-8367 domestically or 416-621-4642 internationally. The access code for the replay of the call is 6870368. The webcast, conference call and replay are open to all interested parties.

About Cologuard

Cologuard was approved by the FDA in August 2014 and results from Exact Sciences’ prospective 90-site, point-in-time, 10,000-patient pivotal trial were published in the New England Journal of Medicine in March 2014. Cologuard is included in the American Cancer Society’s (2014) colorectal cancer screening guidelines and the recommendations of the U.S. Preventive Services Task Force (2016) and National Comprehensive Cancer Network (2016). Cologuard is indicated to screen adults of either sex, 50 years or older, who are at average risk for colorectal cancer. Cologuard is not for everyone and is not a replacement for diagnostic colonoscopy or surveillance colonoscopy in high-risk individuals. False positives and false negatives do occur. Any positive test result should be followed by a diagnostic colonoscopy. Following a negative result, patients should continue participating in a screening program at an interval and with a method appropriate for the individual patient. Cologuard performance when used for repeat testing has not been evaluated or established. Medicare and most major insurers cover Cologuard. For more information about Cologuard, visit www.cologuardtest.com. Rx Only.

On October 30, 2018 Distributed Bio, the global leader in computational optimization of fully human monoclonal antibody libraries, reported a discovery collaboration with H3 Biomedicine, Inc. designed to help accelerate the discovery of novel cancer therapeutics (Press release, Distributed Bio, OCT 30, 2018, View Source [SID1234530430]). The collaboration will leverage Distributed Bio’s proprietary SuperHuman antibody library platform to discover therapeutic-ready, preoptimized antibodies against H3 Biomedicine targets. H3 Biomedicine is a clinical stage biopharmaceutical company specializing in the discovery and development of next-generation cancer medicines using its data science and precision chemistry product engine.

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"H3 Biomedicine is an exciting oncology company, with a novel approach to uncovering targets that could lead to new treatments for unmet needs in various types of cancer," said Jacob Glanville Ph.D., Co-founder & CSO, Distributed Bio. "What was clear to us from the outset was that H3 Biomedicine’s goals would require significant advances to the normal antibody selection process. At Distributed Bio we are uniquely positioned to provide the advanced selection, screening and engineering techniques needed to advance important discovery programs."

Under the terms of the agreement, Distributed Bio will discover antibodies by screening its SuperHuman antibody library with antigens provide by H3 Biomedicine. Multiple lead antibodies will be identified using a proprietary assay cascade. The antibodies generated through this method will be available to H3 Biomedicine to advance to clinical development. Distributed Bio will receive research funding and the opportunity for future milestone payments.

"At H3 Biomedicine, we are focused on uncovering novel cancer biology and rapidly translating those learnings to advance novel, first-in-class precision oncology medicines. As our lead clinical development programs continue to progress, we are also pursuing a broad portfolio of research programs and targets," said Andrea Gerken, Vice President, Business Development at H3 Biomedicine. "As part of those research efforts, our collaboration with Distributed Bio will enable us to explore H3’s differentiated approach to antibody drug conjugates targeting RNA splicing."