On February 8, 2018 Immunomedics, Inc. (NASDAQ:IMMU) ("Immunomedics" or the "Company") reported financial results for the second quarter ended December 31, 2017 (Press release, Immunomedics, FEB 8, 2018, View Source [SID1234523837]). The Company also highlighted recent key progress and planned activities for its sacituzumab govitecan program. Please refer to the Company’s Quarterly Report on Form 10-Q filed today with the SEC for more details on the Company’s financial results.
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Michael Pehl, President and Chief Executive Officer, stated, "We made significant progress this quarter, taking the necessary steps to bring sacituzumab govitecan to market and achieving our vision of becoming a fully-integrated biopharmaceutical company. In December at the San Antonio Breast Cancer Symposium, we presented exciting Phase 2 results with sacituzumab govitecan, which were met with enthusiasm by clinicians around the world. The strength of the clinical profile of the sacituzumab govitecan program was recognized by Royalty Pharma, leading to an investment of $250 million and providing the necessary financial resources to carry out our strategic plan."
"We continue to work diligently on our BLA to be submitted to the FDA for accelerated approval," added Pehl. "I am pleased with the overall progress across clinical and manufacturing work streams, including successful validation runs. Our focus continues to be on compiling a BLA package that efficiently brings sacituzumab govitecan to market, and one that anticipates and addresses potential FDA requests going forward. As such, we now expect to file the BLA by the end of May 2018."
During the quarter, Immunomedics continued to expand its leadership team with the appointment of Dr. Morris Rosenberg as Chief Technology Officer. Dr. Rosenberg was previously responsible for overseeing manufacturing at Seattle Genetics for over 11 years and was instrumental in the development of Seattle Genetics’ ADC supply chain and the launch of Adcetris in 2011. Dr. Rosenberg has been a key consultant to Immunomedics for the past nine months, focusing on building an outstanding team and preparing for commercial launch, including a robust CMC package for BLA submission.
"Immunomedics’ compelling science, technological resources, and the strength of the leadership team is the right recipe for groundbreaking innovation at the Company," said Dr. Morris Rosenberg, Chief Technology Officer. "I am pleased to be joining a team that is building outstanding clinical, manufacturing and commercial infrastructure and taking so many meaningful steps toward effectively treating patients with significant unmet medical needs."
Recent Highlights
In December 2017, Immunomedics presented updated results of sacituzumab govitecan in mTNBC in an oral presentation during the 2017 San Antonio Breast Cancer Symposium. In 110 patients with relapsed or refractory mTNBC, an objective response rate of 31% and a median duration of response of 9.1 months was determined by an adjudication team of radiologists after a blinded, independent review.
In January 2018, as part of the Company’s strategy to broaden the development of sacituzumab govitecan in difficult to treat solid tumors beyond mTNBC and advanced urothelial cancer, Immunomedics announced a collaboration with the Carbone Cancer Center at the University of Wisconsin, to evaluate sacituzumab govitecan in patients with advanced prostate cancer in an investigator-sponsored Phase 2 trial.
In January 2018, Immunomedics announced a $250 million royalty funding and stock purchase agreement with Royalty Pharma. Immunomedics has agreed to sell tiered, sales-based royalty rights on global net sales of sacituzumab govitecan to Royalty Pharma for $175 million and Royalty Pharma has purchased $75 million in common stock of the Company. This transaction provides for sufficient cash to fund operations into 2020.
Key 2018 Objectives
Continue execution of the confirmatory Phase 3 ASCENT study in third line+ mTNBC; activation of first European centers is expected in the first half of 2018.
Continue development in mTNBC setting with PARP and/or PD-1/PD-L1 inhibitors.
Establish sacituzumab govitecan as a foundational therapy in advanced urothelial cancer, both as monotherapy and in combination.
Define registration and commercialization strategy in Europe; ensure the appropriate balance between bringing sacituzumab govitecan to patients as fast as possible while securing favorable reimbursement.
Establish commercial presence and ensure launch readiness for sacituzumab govitecan upon approval in mTNBC.
Second Quarter Fiscal 2018 Results
Total revenues for the quarter ended December 31, 2017, were $0.6 million, compared to $0.4 million for the same quarter last fiscal year, an increase of 55% due primarily to a $0.2 million increase in LeukoScan product sales in Europe. The Company intends to discontinue the sale of LeukoScan during the third quarter of fiscal 2018 to focus exclusively on its oncology portfolio of antibody-drug conjugates, unlabeled antibodies and immuno-oncology investigational products.
Total costs and expenses for the quarter ended December 31, 2017 were $30.0 million, compared to $15.7 million for the same quarter last fiscal year, an increase of $14.3 million, or 91% due primarily to a $12.8 million increase in research and development expenses including a $6.9 million increase in human resources and consulting costs to prepare for the regulatory submission and commercial launch of sacituzumab govitecan for patients with mTNBC and a $5.9 million increase related to the initiation of the Phase 3 ASCENT clinical trial for mTNBC.
The Company recognized $26.8 million in non-cash income during the quarter ended December 31, 2017, compared to $7.2 million in non-cash expense for the same quarter last fiscal year, a $34.0 million decrease in non-cash cost due to the decrease in the fair value of warrant liabilities.
Interest expense related to the 4.75% Convertible Senior Notes due 2020 was $0.3 million for the quarter ended December 31, 2017, compared to $1.4 million for the same quarter last fiscal year, a decrease of $1.1 million, or 79% due primarily to the accelerated exchange of $80 million Convertible Senior Notes for equity on September 21, 2017. Interest expense includes the amortization of debt issuance costs of $0.1 million and $0.2 million for the quarters ended December 31, 2017 and December 31, 2016, respectively.
Net loss attributable to stockholders was $2.5 million, or $0.02 per share, for the quarter ended December 31, 2017, compared to $24.4 million, or $0.23 per share, for the same quarter last fiscal year, a decrease of $21.9 million due primarily to the $34.0 million decrease in non-cash cost from the decrease in the fair value of warrant liabilities, offset partially by the $14.3 million increase in costs and expenses.
First Half Fiscal 2018 Results
Total revenues for the six months ended December 31, 2017, were $1.3 million, compared to $1.1 million for the same period last fiscal year, an increase of 18% due primarily to a $0.2 million increase in LeukoScan product sales in Europe.
Total costs and expenses for the six-month period ended December 31, 2017 were $52.3 million, compared to $31.4 million for the same period last fiscal year, an increase of 67% due primarily to a $15.5 million increase in research and development expenses resulting from an $8.2 million increase in consulting and contract services costs, a $5.7 million increase in costs related to initiating the Phase 3 ASCENT clinical trial, and a $1.7 million increase in labor related costs in connection with the preparation of the regulatory submission and commercial launch of sacituzumab govitecan. General and administrative expenses increased $4.0 million compared to the same period in the previous year, due primarily to a $2.1 million increase in legal and advisory fees associated with the proxy contest, and a $1.4 million increase in labor related costs.
The Company recognized $59.6 million in non-cash expense during the six-month period ended December 31, 2017, compared to $7.2 million in the same period in fiscal 2017, an increase of $52.4 million due to the increase in the fair value of warrant liabilities. The Company also recognized a $13.0 million non-cash loss on induced exchanges of $80 million of Convertible Senior Notes for equity.
Interest expense related to the Convertible Senior Notes was $2.9 million for the six-month period ended December 31, 2017, compared to $2.7 million for the same period last year, an increase of $0.2 million due primarily to a $1.4 million increase in the amortization of debt issuance costs offset partially by a $1.2 million reduction in interest expense related to the reduction in principal from the accelerated exchange of Convertible Senior Notes.
During the six-month period ended December 31, 2017, the Company received a $4.4 million insurance reimbursement related to legal costs incurred during the Company’s proxy contest in fiscal year 2017.
Net loss attributable to stockholders was $121.3 million, or $0.88 per share, for the six-month period ended December 31, 2017, compared to $40.6 million, or $0.41 per share for the same period last fiscal year, an increase of $80.7 million due primarily to the $52.4 million increase in non-cash expense, the $20.9 million increase in costs and expenses, and the $13.0 million non-cash loss on induced exchanges of debt, offset partially by the receipt of $4.4 million insurance reimbursement.
Cash, cash equivalents, and marketable securities totaled $139.7 million as of December 31, 2017.
"The $250 million funding from Royalty Pharma combined with our cash balance as of December 31, 2017 provides us with the resources required to support our next phase of growth as we focus on developing sacituzumab govitecan in mTNBC, advanced urothelial cancer and other indications of high unmet medical need, further building our clinical, medical affairs, commercial and manufacturing infrastructure and continuing operations into 2020," according to Michael R. Garone, Vice President Finance and Chief Financial Officer.
Conference Call
The Company will host a conference call and live audio webcast today at 5:00 p.m. Eastern Time to discuss financial results for the second quarter of fiscal year 2018, and review key clinical developments and planned activities. To access the conference call, please dial (877) 303-2523 or (253) 237-1755 using the Conference ID 1988406. The conference call will be webcast via the Investors page on the Company’s website at View Source Approximately two hours following the live event, a webcast replay of the conference call will be available on the Company’s website for approximately 30 days.