On October 27, 2017 Merck (NYSE:MRK), known as MSD outside the United States and Canada, reported financial results for the third quarter of 2017 (Press release, Merck & Co, OCT 27, 2017, View Source [SID1234521238]).

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"Our performance in the third quarter demonstrates the strength of our underlying business, with growth from key product launches, good global demand for vaccines, as well as strength from our Animal Health business," said Kenneth C. Frazier, chairman and chief executive officer, Merck. "We will continue augmenting our pipeline through value-creating business development like our oncology collaboration with AstraZeneca to address unmet medical need and drive future growth."

Financial Summary

Third Quarter
$ in millions, except EPS amounts 2017 2016
Sales $10,325 $10,536
GAAP net (loss) income1
(56) 2,184
Non-GAAP net income that excludes items listed below1,2
3,054 2,989
GAAP EPS (0.02) 0.78
Non-GAAP EPS that excludes items listed below2
1.11 1.07

Worldwide sales were $10.3 billion for the third quarter of 2017, a decrease of 2 percent compared with the third quarter of 2016, including a 1 percent positive impact from foreign exchange.

Sales in the third quarter of 2017 were reduced by approximately $240 million due to a borrowing from the U.S. Centers for Disease Control and Prevention Pediatric Vaccine Stockpile of GARDASIL 9 (Human Papillomavirus 9-valent Vaccine, Recombinant), a vaccine to prevent certain cancers and other diseases caused by HPV, driven in part by the temporary production shutdown resulting from the cyber-attack, as well as overall higher demand than originally planned.

Additionally, as expected, revenue was unfavorably impacted by approximately $135 million from lost sales in certain markets related to the cyber-attack. Sales in the third quarter of 2017 compared with the third quarter of 2016 were also unfavorably impacted by approximately $150 million of additional sales in Japan in the third quarter of 2016 resulting from the timing of shipments. Sales in the third quarter of 2017 reflect incremental sales of approximately $130 million due to the recording of vaccine sales from 19 European countries that were part of the Sanofi Pasteur MSD (SPMSD) vaccines joint venture, which was terminated on Dec. 31, 2016.

GAAP (generally accepted accounting principles) earnings (loss) per share assuming dilution (EPS) were $(0.02) for the third quarter of 2017, which reflects a $2.35 billion aggregate charge related to the formation of a strategic oncology collaboration with AstraZeneca. Non-GAAP EPS of $1.11 for the third quarter of 2017 excludes acquisition- and divestiture-related costs, restructuring costs, the charge related to the AstraZeneca collaboration referenced above and certain other items. Year-to-date results can be found in the attached tables.

Pipeline Highlights

Merck expanded its focus in oncology by further advancing the development program for KEYTRUDA (pembrolizumab), an anti-PD-1 therapy, receiving key regulatory approvals and through business development transactions.

The U.S. Food and Drug Administration (FDA) approved KEYTRUDA under its Accelerated Approval program for the treatment of patients with recurrent locally advanced or metastatic gastric or gastroesophageal junction adenocarcinoma whose tumors express PD-L1 and who have already received two or more lines of chemotherapy.
The European Commission approved KEYTRUDA for the treatment of certain patients with locally advanced or metastatic urothelial carcinoma.
At the European Society for Medical Oncology 2017 Congress, data were presented from studies evaluating the use of KEYTRUDA as a monotherapy and combination therapy in 12 cancers.
Merck is amending the KEYNOTE-189 study to include overall survival as a co-primary endpoint. The updated completion date is Feb. 2019 and there will be opportunities for the company to conduct interim analyses. KEYNOTE-189 is a Phase 3 study of platinum-pemetrexed chemotherapy with or without KEYTRUDA in patients with first line metastatic non-squamous non-small cell lung cancer (NSCLC).
Merck entered into an oncology collaboration with AstraZeneca to co-develop and co-commercialize AstraZeneca’s Lynparza (olaparib), a PARP inhibitor, and investigational medicine selumetinib, a MEK inhibitor, as monotherapy and in combination treatments for multiple cancer types.
The FDA approved Lynparza for new and additional uses in ovarian cancer, including as a maintenance treatment for recurrent epithelial ovarian, fallopian tube or primary peritoneal adult cancer patients who are in response to platinum-based chemotherapy, regardless of BRCA status, and in tablets for the use in patients with deleterious or suspected deleterious germline BRCA-mutated advanced ovarian cancer, who have been treated with three or more prior lines of chemotherapy.
The FDA accepted for review the supplemental New Drug Application (NDA) for the use of Lynparza tablets in patients with germline BRCA-mutated, HER2-negative metastatic breast cancer who have been previously treated with chemotherapy either in the neoadjuvant, adjuvant or metastatic settings. The FDA granted Priority Review with a PDUFA action date in the first quarter of 2018. A NDA was also submitted to Japan’s Pharmaceuticals and Medical Devices Agency.
Merck acquired Rigontec, a pioneer in accessing the retinoic acid-inducible gene I (RIG-I) pathway, part of the innate immune system, as a novel and distinct approach in cancer immunotherapy to induce both immediate and long-term anti-tumor immunity. Rigontec’s lead candidate, RGT100, is currently in Phase I development evaluating treatment in patients with various tumors. The acquisition closed in October.
Merck presented results at the European Research Organization on Genital Infection and Neoplasia Congress from the final analyses of the pivotal Phase 3 efficacy, immunogenicity and safety clinical trial for GARDASIL 9 showing sustained efficacy for up to six years in the per protocol population.

Merck presented data at ID Week 2017 from the pivotal Phase 3 clinical study of letermovir, an investigational antiviral medicine for prophylaxis of cytomegalovirus (CMV) infection or disease in adult CMV-seropositive recipients of an allogeneic hematopoietic stem cell transplant. Data were also presented from the Phase 1 trial for V160, an investigational vaccine for human CMV, evaluating safety, tolerability and immunogenicity in healthy adults.

Merck announced it will not submit applications for regulatory approval for anacetrapib, the investigational cholesteryl ester transfer protein inhibitor, following a thorough review of the clinical profile of anacetrapib, including discussions with external experts.

Merck announced the strategic decision to discontinue the development of the investigational combination regimens MK-3682B (grazoprevir/ruzasvir/uprifosbuvir) and MK-3682C (ruzasvir/uprifosbuvir) for the treatment of chronic hepatitis C virus (HCV) infection. This decision was made based on a review of available Phase 2 efficacy data and in consideration of the evolving marketplace and the growing number of treatment options available for patients with chronic HCV infection, including ZEPATIER (elbasvir and grazoprevir).

Third-Quarter Revenue Performance

The following table reflects sales of the company’s top pharmaceutical products, as well as total sales of Animal Health products.

$ in millions Third Quarter
2017 2016 Change
Change
Ex-Exchange
Total Sales $10,325 $10,536 -2% -3%
Pharmaceutical 9,156 9,443 -3% -4%
JANUVIA / JANUMET 1,525 1,554 -2% -2%
KEYTRUDA 1,047 356 194% 192%
GARDASIL / GARDASIL 9 675 860 -22% -22%
PROQUAD,
M-M-R II and VARIVAX
519 496 4% 5%
ZEPATIER 468 164 185% 184%
ZETIA / VYTORIN 462 944 -51% -52%
ISENTRESS / ISENTRESS HD 310 372 -17% -18%
ZOSTAVAX 234 190 23% 23%
PNEUMOVAX 23 229 175 31% 31%
Animal Health 1,000 865 16% 14%
Other Revenues 169 228 -26% -13%

Pharmaceutical Revenue

Third-quarter pharmaceutical sales decreased 3 percent to $9.2 billion, including a 1 percent positive impact from foreign exchange. In addition to the factors mentioned in the Financial Summary above, sales in the third quarter of 2017 reflect the loss of market exclusivity for several products, as well as lower sales of JANUVIA (sitagliptin) and JANUMET (sitagliptin and metformin HCl), medicines that help lower blood sugar in adults with type 2 diabetes. These declines were partially offset by significant growth in KEYTRUDA and from other product launches, as well as from growth in certain in-line brands.

The pharmaceutical sales decline was largely driven by the loss of U.S. market exclusivity for ZETIA (ezetimibe) in late 2016 and VYTORIN (ezetimibe/simvastatin) in April 2017, medicines for lowering LDL cholesterol, and the ongoing impacts of generic competition for CUBICIN (daptomycin for injection), an I.V. antibiotic, and biosimilar competition for REMICADE (infliximab), a treatment for inflammatory diseases, in the company’s marketing territories in Europe. In the aggregate, sales of these products declined approximately $800 million during the third quarter of 2017 compared to the third quarter of 2016.

Additionally, the decline reflects lower sales of GARDASIL [Human Papillomavirus Quadrivalent (Types 6, 11, 16 and 18) Vaccine, Recombinant] and GARDASIL 9, vaccines to prevent certain cancers and other diseases caused by HPV, largely attributable to lower sales in the United States as described previously, partially offset by growth in Europe due to the termination of the SPMSD vaccines joint venture noted above, and growth in Asia Pacific reflecting strong demand.

The decrease in the diabetes franchise of JANUVIA and JANUMET was primarily due to pricing pressure partially offset by continued volume growth globally.

Higher sales of KEYTRUDA reflect the company’s continued launch with new indications globally. Strong momentum from the treatment of patients with NSCLC contributed significantly to KEYTRUDA’s overall growth, as KEYTRUDA is the only anti-PD-1 approved in the first-line setting.

Growth in ZEPATIER is due to ongoing launches globally. The company anticipates that future sales of ZEPATIER will be unfavorably affected by increasing competition and declining patient volumes.

Additionally, the ongoing launch of BRIDION (sugammadex) Injection 100 mg/mL, a medicine for the reversal of neuromuscular blockade induced by rocuronium bromide or vecuronium bromide in adults undergoing surgery, generated sales of $185 million in the quarter driven largely by strong growth in the United States.

Growth in PNEUMOVAX 23 (pneumococcal vaccine polyvalent), a vaccine to help prevent pneumococcal disease, was largely due to higher demand and pricing in the United States.

Animal Health Revenue

Animal Health sales totaled $1.0 billion for the third quarter of 2017, an increase of 16 percent compared with the third quarter of 2016, including a 2 percent positive impact from foreign exchange. Growth was driven by sales increases in companion animal products, primarily the BRAVECTO (fluralaner) line of products that kill fleas and ticks in dogs and cats for up to 12 weeks, and companion animal vaccines. Additionally, higher sales of ruminants products, including the positive impact of the Vallée S.A. acquisition which closed in March, swine products and poultry products all contributed to growth.

Third-Quarter Expense, EPS and Related Information

The table below presents selected expense information.

$ in millions
Third-Quarter 2017

GAAP

Acquisition- and
Divestiture-
Related Costs 3

Restructuring
Costs

Certain Other
Items

Non-GAAP 2
Materials and production $3,274 $768 $25 $– $2,481
Marketing and administrative 2,401 11 – – 2,390
Research and development 4,383 271 2 2,350 1,760
Restructuring costs 153 – 153 – –
Other (income) expense, net (86) (18) – – (68)

Third-Quarter 2016
Materials and production $3,409 $773 $36 $– $2,600
Marketing and administrative 2,393 36 1 – 2,356
Research and development 1,664 13 14 – 1,637
Restructuring costs 161 – 161 – –
Other (income) expense, net 22 12 – (6) 16

GAAP Expense, EPS and Related Information

On a GAAP basis, the gross margin was 68.3 percent for the third quarter of 2017 compared to 67.6 percent for the third quarter of 2016. The increase in gross margin for the third quarter of 2017 was primarily driven by the favorable effects of product mix partially offset by costs related to the cyber-attack.

Marketing and administrative expenses were $2.4 billion in the third quarter of 2017, essentially flat as compared to the third quarter of 2016. Lower acquisition- and divestiture-related costs were offset by costs associated with the company now operating its European vaccines business in the countries that were previously part of the SPMSD vaccines joint venture, higher promotion expenses related to product launches and remediation costs related to the cyber-attack.

Research and development (R&D) expenses were $4.4 billion in the third quarter of 2017 compared with $1.7 billion in the third quarter of 2016. The increase primarily reflects a $2.35 billion aggregate charge related to the formation of the collaboration with AstraZeneca, higher in-process research and development (IPR&D) impairment charges driven by a $240 million charge resulting from the decision to discontinue the development of investigational HCV combination regimens MK-3682B and MK-3682C noted above, and increased investment in early drug development.

The GAAP effective income tax rate of 125.5 percent for the third quarter of 2017 reflects the unfavorable impact of a $2.35 billion aggregate charge related to the formation of the AstraZeneca collaboration for which no tax benefit has been recognized, partially offset by the favorable impact of a net tax benefit of $234 million related to the settlement of certain federal income tax issues.

GAAP EPS was $(0.02) for the third quarter of 2017 compared with $0.78 for the third quarter of 2016.

Non-GAAP Expense, EPS and Related Information

The non-GAAP gross margin was 76.0 percent for the third quarter of 2017 compared to 75.3 percent for the third quarter of 2016. The increase in non-GAAP gross margin was largely driven by the favorable effects of product mix partially offset by costs related to the cyber-attack.

Non-GAAP marketing and administrative expenses were $2.4 billion in the third quarter of 2017, an increase of 1 percent compared to the third quarter of 2016. The increase in non-GAAP marketing and administrative expenses was driven primarily by costs associated with the company now operating its European vaccines business in the countries that were previously part of the SPMSD vaccines joint venture, higher promotion expenses related to product launches and remediation costs related to the cyber-attack.

Non-GAAP R&D expenses were $1.8 billion in the third quarter of 2017, an 8 percent increase compared to the third quarter of 2016. The increase reflects increased investment in early drug development.

The non-GAAP effective income tax rate was 18.7 percent compared to 23.8 percent in the third quarter of 2016.

Non-GAAP EPS was $1.11 for the third quarter of 2017 compared with $1.07 for the third quarter of 2016.

A reconciliation of GAAP to non-GAAP net income and EPS is provided in the table that follows.

$ in millions, except EPS amounts Third Quarter
2017 2016
EPS
GAAP EPS $(0.02) $0.78
Difference4
1.13 0.29
Non-GAAP EPS that excludes items listed below2 $1.11 $1.07

Net Income
GAAP net (loss) income1 $(56) $2,184
Difference 3,110 805
Non-GAAP net income that excludes items listed below1,2 $3,054 $2,989

Decrease (Increase) in Net Income Due to Excluded Items:
Acquisition- and divestiture-related costs3 $1,032 $834
Restructuring costs 180 212
Aggregate charge related to the formation of the collaboration with AstraZeneca 2,350 –
Other – (6)
Net decrease (increase) in income before taxes 3,562 1,040
Income tax (benefit) expense5
(452) (235)
Decrease (increase) in net income $3,110 $805

Financial Outlook

Merck has narrowed and raised its full-year 2017 GAAP EPS range to be between $1.78 and $1.84. Merck narrowed and raised its full-year 2017 non-GAAP EPS range to be between $3.91 and $3.97, including a less than 1 percent negative impact from foreign exchange at current exchange rates. The non-GAAP range excludes acquisition- and divestiture-related costs, costs related to restructuring programs, a charge related to the formation of the collaboration with AstraZeneca and certain other items.

Merck has narrowed and raised its full-year 2017 revenue range to be between $40.0 billion and $40.5 billion, including a less than 1 percent negative impact from foreign exchange at current exchange rates.

The following table summarizes the company’s 2017 financial guidance.

GAAP Non-GAAP 2

Revenue $40.0 to $40.5 billion
$40.0 to $40.5 billion*
Operating expenses Lower than 2016 Higher than 2016 by a mid-single digit rate
Effective tax rate 24.5% to 25.5% 20.0% to 21.0%
EPS $1.78 to $1.84 $3.91 to $3.97
*The company does not have any non-GAAP adjustments to revenue.

A reconciliation of anticipated 2017 GAAP EPS to non-GAAP EPS and the items excluded from non-GAAP EPS are provided in the table below.

$ in millions, except EPS amounts

Full-Year 2017

GAAP EPS $1.78 to $1.84
Difference4 2.13
Non-GAAP EPS that excludes items listed below2 $3.91 to $3.97

Acquisition- and divestiture-related costs $3,800
Restructuring costs 850
Aggregate charge related to the formation of the collaboration with AstraZeneca 2,350
Net decrease (increase) in income before taxes 7,000
Estimated income tax (benefit) expense (1,130)
Decrease (increase) in net income $5,870

The expected full-year 2017 GAAP effective tax rate of 24.5 to 25.5 percent reflects an unfavorable impact of approximately 4.5 percentage points from the above items.

Total Employees

As of Sept. 30, 2017, Merck had approximately 69,500 employees worldwide.

On October 27, 2017 Merck (NYSE:MRK), known as MSD outside the United States and Canada, reported that it has withdrawn its European application for KEYTRUDA (pembrolizumab) in combination with pemetrexed and carboplatin as a first-line treatment for metastatic nonsquamous non-small cell lung cancer (NSCLC) (Press release, Merck & Co, OCT 27, 2017, View Source [SID1234521257]).

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The application was based on findings from KEYNOTE-021, Cohort G. Merck is confident in the clinical data from this rigorously conducted trial, which demonstrated significant improvements in overall response rate (ORR) and progression-free survival (PFS) for the KEYTRUDA combination regimen compared to chemotherapy alone. Additionally, the company’s broad clinical development program includes a number of studies evaluating KEYTRUDA in combination with chemotherapy in the first-line NSCLC setting. Merck looks forward to sharing data from these studies with regulatory authorities and the medical community as they become available.

About KEYTRUDA (pembrolizumab) Injection 100 mg

KEYTRUDA is an anti-PD-1 therapy that works by increasing the ability of the body’s immune system to help detect and fight tumor cells. KEYTRUDA is a humanized monoclonal antibody that blocks the interaction between PD-1 and its ligands, PD-L1 and PD-L2, thereby activating T lymphocytes which may affect both tumor cells and healthy cells.

Merck has the industry’s largest immuno-oncology clinical research program, which currently involves more than 600 trials studying KEYTRUDA (pembrolizumab) across a wide variety of cancers and treatment settings. The KEYTRUDA clinical program seeks to understand the role of KEYTRUDA across cancers and the factors that may predict a patient’s likelihood of benefitting from treatment with KEYTRUDA, including exploring several different biomarkers.

KEYTRUDA (pembrolizumab) Indications and Dosing

Melanoma

KEYTRUDA is indicated for the treatment of patients with unresectable or metastatic melanoma at a fixed dose of 200 mg every three weeks until disease progression or unacceptable toxicity.

Lung Cancer

KEYTRUDA, as a single agent, is indicated for the first-line treatment of patients with metastatic non-small cell lung cancer (NSCLC) whose tumors have high PD-L1 expression [tumor proportion score (TPS) ≥50%] as determined by an FDA-approved test, with no EGFR or ALK genomic tumor aberrations.

KEYTRUDA, as a single agent, is also indicated for the treatment of patients with metastatic NSCLC whose tumors express PD-L1 (TPS ≥1%) as determined by an FDA-approved test, with disease progression on or after platinum-containing chemotherapy. Patients with EGFR or ALK genomic tumor aberrations should have disease progression on FDA-approved therapy for these aberrations prior to receiving KEYTRUDA.

KEYTRUDA, in combination with pemetrexed and carboplatin, is indicated for the first-line treatment of patients with metastatic nonsquamous NSCLC. This indication is approved under accelerated approval based on tumor response rate and progression-free survival. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials.

In metastatic NSCLC, KEYTRUDA is administered at a fixed dose of 200 mg every three weeks until disease progression, unacceptable toxicity, or up to 24 months in patients without disease progression.

When administering KEYTRUDA in combination with chemotherapy, KEYTRUDA should be administered prior to chemotherapy when given on the same day. See also the Prescribing Information for pemetrexed and carboplatin.

Head and Neck Cancer

KEYTRUDA (pembrolizumab) is indicated for the treatment of patients with recurrent or metastatic head and neck squamous cell carcinoma (HNSCC) with disease progression on or after platinum-containing chemotherapy. This indication is approved under accelerated approval based on tumor response rate and durability of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials. In HNSCC, KEYTRUDA is administered at a fixed dose of 200 mg every three weeks until disease progression, unacceptable toxicity, or up to 24 months in patients without disease progression.

Classical Hodgkin Lymphoma

KEYTRUDA is indicated for the treatment of adult and pediatric patients with refractory classical Hodgkin lymphoma (cHL), or who have relapsed after three or more prior lines of therapy. This indication is approved under accelerated approval based on tumor response rate and durability of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials. In adults with cHL, KEYTRUDA is administered at a fixed dose of 200 mg every three weeks until disease progression or unacceptable toxicity, or up to 24 months in patients without disease progression. In pediatric patients with cHL, KEYTRUDA is administered at a dose of 2 mg/kg (up to a maximum of 200 mg) every three weeks until disease progression or unacceptable toxicity, or up to 24 months in patients without disease progression.

Urothelial Carcinoma

KEYTRUDA is indicated for the treatment of patients with locally advanced or metastatic urothelial carcinoma who are not eligible for cisplatin-containing chemotherapy. This indication is approved under accelerated approval based on tumor response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials.

KEYTRUDA is also indicated for the treatment of patients with locally advanced or metastatic urothelial carcinoma who have disease progression during or following platinum-containing chemotherapy or within 12 months of neoadjuvant or adjuvant treatment with platinum-containing chemotherapy.

In locally advanced or metastatic urothelial carcinoma, KEYTRUDA is administered at a fixed dose of 200 mg every three weeks until disease progression or unacceptable toxicity, or up to 24 months in patients without disease progression.

Microsatellite Instability-High (MSI-H) Cancer

KEYTRUDA (pembrolizumab) is indicated for the treatment of adult and pediatric patients with unresectable or metastatic microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR)

solid tumors that have progressed following prior treatment and who have no satisfactory alternative treatment options, or
colorectal cancer that has progressed following treatment with fluoropyrimidine, oxaliplatin, and irinotecan.
This indication is approved under accelerated approval based on tumor response rate and durability of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials. The safety and effectiveness of KEYTRUDA in pediatric patients with MSI-H central nervous system cancers have not been established.

In adult patients with MSI-H cancer, KEYTRUDA is administered at a fixed dose of 200 mg every three weeks until disease progression, unacceptable toxicity, or up to 24 months in patients without disease progression. In children with MSI-H cancer, KEYTRUDA is administered at a dose of 2 mg/kg (up to a maximum of 200 mg) every three weeks until disease progression or unacceptable toxicity, or up to 24 months in patients without disease progression.

Gastric Cancer

KEYTRUDA is indicated for the treatment of patients with recurrent locally advanced or metastatic gastric or gastroesophageal junction (GEJ) adenocarcinoma whose tumors express PD-L1 [Combined Positive Score (CPS) ≥1] as determined by an FDA-approved test, with disease progression on or after two or more prior lines of therapy including fluoropyrimidine- and platinum-containing chemotherapy and if appropriate, HER2/neu-targeted therapy. This indication is approved under accelerated approval based on tumor response rate and durability of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials. The recommended dose of KEYTRUDA is 200 mg every three weeks until disease progression, unacceptable toxicity, or up to 24 months in patients without disease progression.

Selected Important Safety Information for KEYTRUDA (pembrolizumab)

KEYTRUDA can cause immune-mediated pneumonitis, including fatal cases. Pneumonitis occurred in 94 (3.4%) of 2799 patients receiving KEYTRUDA, including Grade 1 (0.8%), 2 (1.3%), 3 (0.9%), 4 (0.3%), and 5 (0.1%) pneumonitis, and occurred more frequently in patients with a history of prior thoracic radiation (6.9%) compared to those without (2.9%). Monitor patients for signs and symptoms of pneumonitis. Evaluate suspected pneumonitis with radiographic imaging. Administer corticosteroids for Grade 2 or greater pneumonitis. Withhold KEYTRUDA for Grade 2; permanently discontinue KEYTRUDA for Grade 3 or 4 or recurrent Grade 2 pneumonitis.

KEYTRUDA can cause immune-mediated colitis. Colitis occurred in 48 (1.7%) of 2799 patients receiving KEYTRUDA, including Grade 2 (0.4%), 3 (1.1%), and 4 (<0.1%) colitis. Monitor patients for signs and symptoms of colitis. Administer corticosteroids for Grade 2 or greater colitis. Withhold KEYTRUDA for Grade 2 or 3; permanently discontinue KEYTRUDA for Grade 4 colitis.

KEYTRUDA can cause immune-mediated hepatitis. Hepatitis occurred in 19 (0.7%) of 2799 patients receiving KEYTRUDA, including Grade 2 (0.1%), 3 (0.4%), and 4 (<0.1%) hepatitis. Monitor patients for changes in liver function. Administer corticosteroids for Grade 2 or greater hepatitis and, based on severity of liver enzyme elevations, withhold or discontinue KEYTRUDA.

KEYTRUDA can cause hypophysitis. Hypophysitis occurred in 17 (0.6%) of 2799 patients receiving KEYTRUDA, including Grade 2 (0.2%), 3 (0.3%), and 4 (<0.1%) hypophysitis. Monitor patients for signs and symptoms of hypophysitis (including hypopituitarism and adrenal insufficiency). Administer corticosteroids and hormone replacement as clinically indicated. Withhold KEYTRUDA for Grade 2; withhold or discontinue for Grade 3 or 4 hypophysitis.

KEYTRUDA can cause thyroid disorders, including hyperthyroidism, hypothyroidism, and thyroiditis. Hyperthyroidism occurred in 96 (3.4%) of 2799 patients receiving KEYTRUDA, including Grade 2 (0.8%) and 3 (0.1%) hyperthyroidism. Hypothyroidism occurred in 237 (8.5%) of 2799 patients receiving KEYTRUDA, including Grade 2 (6.2%) and 3 (0.1%) hypothyroidism. The incidence of new or worsening hypothyroidism was higher in patients with HNSCC, occurring in 28 (15%) of 192 patients with HNSCC, including Grade 3 (0.5%) hypothyroidism. Thyroiditis occurred in 16 (0.6%) of 2799 patients receiving KEYTRUDA, including Grade 2 (0.3%) thyroiditis. Monitor patients for changes in thyroid function (at the start of treatment, periodically during treatment, and as indicated based on clinical evaluation) and for clinical signs and symptoms of thyroid disorders. Administer replacement hormones for hypothyroidism and manage hyperthyroidism with thionamides and beta-blockers as appropriate. Withhold or discontinue KEYTRUDA (pembrolizumab) for Grade 3 or 4 hyperthyroidism.

KEYTRUDA can cause type 1 diabetes mellitus, including diabetic ketoacidosis, which have been reported in 6 (0.2%) of 2799 patients. Monitor patients for hyperglycemia or other signs and symptoms of diabetes. Administer insulin for type 1 diabetes, and withhold KEYTRUDA and administer antihyperglycemics in patients with severe hyperglycemia.

KEYTRUDA can cause immune-mediated nephritis. Nephritis occurred in 9 (0.3%) of 2799 patients receiving KEYTRUDA, including Grade 2 (0.1%), 3 (0.1%), and 4 (<0.1%) nephritis. Monitor patients for changes in renal function. Administer corticosteroids for Grade 2 or greater nephritis. Withhold KEYTRUDA for Grade 2; permanently discontinue KEYTRUDA for Grade 3 or 4 nephritis.

Immune-mediated rashes, including Stevens-Johnson syndrome (SJS), toxic epidermal necrolysis (TEN) (some cases with fatal outcome), exfoliative dermatitis, and bullous pemphigoid, can occur. Monitor patients for suspected severe skin reactions and based on the severity of the adverse reaction, withhold or permanently discontinue KEYTRUDA and administer corticosteroids. For signs and symptoms of SJS or TEN, withhold KEYTRUDA and refer the patient for specialized care for assessment and treatment. If SJS or TEN is confirmed, permanently discontinue KEYTRUDA.

KEYTRUDA can cause other clinically important immune-mediated adverse reactions. These immune-mediated reactions may occur in any organ system. For suspected immune-mediated adverse reactions, ensure adequate evaluation to confirm etiology or exclude other causes. Based on the severity of the adverse reaction, withhold KEYTRUDA and administer corticosteroids. Upon improvement to Grade 1 or less, initiate corticosteroid taper and continue to taper over at least 1 month. Based on limited data from clinical studies in patients whose immune-related adverse reactions could not be controlled with corticosteroid use, administration of other systemic immunosuppressants can be considered. Resume KEYTRUDA when the adverse reaction remains at Grade 1 or less following corticosteroid taper. Permanently discontinue KEYTRUDA for any Grade 3 immune-mediated adverse reaction that recurs and for any life-threatening immune-mediated adverse reaction.

The following clinically significant immune-mediated adverse reactions occurred in less than 1% (unless otherwise indicated) of 2799 patients: arthritis (1.5%), uveitis, myositis, Guillain-Barré syndrome, myasthenia gravis, vasculitis, pancreatitis, hemolytic anemia, and partial seizures arising in a patient with inflammatory foci in brain parenchyma. In addition, myelitis and myocarditis were reported in other clinical trials, including classical Hodgkin lymphoma, and post-marketing use.

Solid organ transplant rejection has been reported in postmarketing use of KEYTRUDA (pembrolizumab). Treatment with KEYTRUDA may increase the risk of rejection in solid organ transplant recipients. Consider the benefit of treatment with KEYTRUDA vs the risk of possible organ rejection in these patients.

KEYTRUDA can cause severe or life-threatening infusion-related reactions, including hypersensitivity and anaphylaxis, which have been reported in 6 (0.2%) of 2799 patients. Monitor patients for signs and symptoms of infusion-related reactions, including rigors, chills, wheezing, pruritus, flushing, rash, hypotension, hypoxemia, and fever. For Grade 3 or 4 reactions, stop infusion and permanently discontinue KEYTRUDA.

Immune-mediated complications, including fatal events, occurred in patients who underwent allogeneic hematopoietic stem cell transplantation (HSCT) after being treated with KEYTRUDA. Of 23 patients with cHL who proceeded to allogeneic HSCT after treatment with KEYTRUDA on any trial, 6 patients (26%) developed graft-versus-host disease (GVHD), one of which was fatal, and 2 patients (9%) developed severe hepatic veno-occlusive disease (VOD) after reduced-intensity conditioning, one of which was fatal. Cases of fatal hyperacute GVHD after allogeneic HSCT have also been reported in patients with lymphoma who received a PD-1 receptor–blocking antibody before transplantation. These complications may occur despite intervening therapy between PD-1 blockade and allogeneic HSCT. Follow patients closely for early evidence of transplant-related complications such as hyperacute GVHD, severe (Grade 3 to 4) acute GVHD, steroid-requiring febrile syndrome, hepatic VOD, and other immune-mediated adverse reactions, and intervene promptly.

Based on its mechanism of action, KEYTRUDA can cause fetal harm when administered to a pregnant woman. If used during pregnancy, or if the patient becomes pregnant during treatment, apprise the patient of the potential hazard to a fetus. Advise females of reproductive potential to use highly effective contraception during treatment and for 4 months after the last dose of KEYTRUDA.

In KEYNOTE-006, KEYTRUDA was discontinued due to adverse reactions in 9% of 555 patients with advanced melanoma; adverse reactions leading to discontinuation in more than one patient were colitis (1.4%), autoimmune hepatitis (0.7%), allergic reaction (0.4%), polyneuropathy (0.4%), and cardiac failure (0.4%). Adverse reactions leading to interruption of KEYTRUDA occurred in 21% of patients; the most common (≥1%) was diarrhea (2.5%). The most common adverse reactions with KEYTRUDA vs ipilimumab were fatigue (28% vs 28%), diarrhea (26% with KEYTRUDA [pembrolizumab]), rash (24% vs 23%), and nausea (21% with KEYTRUDA). Corresponding incidence rates are listed for ipilimumab only for those adverse reactions that occurred at the same or lower rate than with KEYTRUDA.

In KEYNOTE-010, KEYTRUDA monotherapy was discontinued due to adverse reactions in 8% of 682 patients with metastatic NSCLC. The most common adverse event resulting in permanent discontinuation of KEYTRUDA was pneumonitis (1.8%). Adverse reactions leading to interruption of KEYTRUDA occurred in 23% of patients; the most common (≥1%) were diarrhea (1%), fatigue (1.3%), pneumonia (1%), liver enzyme elevation (1.2%), decreased appetite (1.3%), and pneumonitis (1%). The most common adverse reactions (occurring in at least 20% of patients and at a higher incidence than with docetaxel) were decreased appetite (25% vs 23%), dyspnea (23% vs 20%), and nausea (20% vs 18%).

In KEYNOTE-021(G1), when KEYTRUDA was administered in combination with carboplatin and pemetrexed (carbo/pem) in advanced nonsquamous NSCLC, KEYTRUDA was discontinued in 10% of 59 patients. The most common adverse reaction resulting in discontinuation of KEYTRUDA (≥2%) was acute kidney injury (3.4%). Adverse reactions leading to interruption of KEYTRUDA occurred in 39% of patients; the most common (≥2%) were fatigue (8%), neutrophil count decreased (8%), anemia (5%), dyspnea (3.4%), and pneumonitis (3.4%).The most common adverse reactions (≥20%) with KEYTRUDA compared to carbo/pem alone were fatigue (71% vs 50%), nausea (68% vs 56%), constipation (51% vs 37%), rash (42% vs 21%), vomiting (39% vs 27%), dyspnea (39% vs 21%), diarrhea (37% vs 23%), decreased appetite (31% vs 23%), headache (31% vs 16%), cough (24% vs 18%), dizziness (24% vs 16%), insomnia (24% vs 15%), pruritus (24% vs 4.8%), peripheral edema (22% vs 18%), dysgeusia (20% vs 11%), alopecia (20% vs 3.2%), upper respiratory tract infection (20% vs 3.2%), and arthralgia (15% vs 24%). This study was not designed to demonstrate a statistically significant difference in adverse reaction rates for KEYTRUDA as compared to carbo/pem alone for any specified adverse reaction.

In KEYNOTE-012, KEYTRUDA was discontinued due to adverse reactions in 17% of 192 patients with HNSCC. Serious adverse reactions occurred in 45% of patients. The most frequent serious adverse reactions reported in at least 2% of patients were pneumonia, dyspnea, confusional state, vomiting, pleural effusion, and respiratory failure. The most common adverse reactions (reported in at least 20% of patients) were fatigue, decreased appetite, and dyspnea. Adverse reactions occurring in patients with HNSCC were generally similar to those occurring in patients with melanoma or NSCLC, with the exception of increased incidences of facial edema (10% all Grades; 2.1% Grades 3 or 4) and new or worsening hypothyroidism.

In KEYNOTE-087, KEYTRUDA (pembrolizumab) was discontinued due to adverse reactions in 5% of 210 patients with cHL, and treatment was interrupted due to adverse reactions in 26% of patients. Fifteen percent (15%) of patients had an adverse reaction requiring systemic corticosteroid therapy. Serious adverse reactions occurred in 16% of patients. The most frequent serious adverse reactions (≥1%) included pneumonia, pneumonitis, pyrexia, dyspnea, GVHD, and herpes zoster. Two patients died from causes other than disease progression; one from GVHD after subsequent allogeneic HSCT and one from septic shock. The most common adverse reactions (occurring in ≥20% of patients) were fatigue (26%), pyrexia (24%), cough (24%), musculoskeletal pain (21%), diarrhea (20%), and rash (20%).

In KEYNOTE-052, KEYTRUDA was discontinued due to adverse reactions in 11% of 370 patients with locally advanced or metastatic urothelial carcinoma. The most common adverse reactions (in≥20% of patients) were fatigue (38%), musculoskeletal pain (24%), decreased appetite (22%), constipation (21%), rash (21%), and diarrhea (20%). Eighteen patients (5%) died from causes other than disease progression. Five patients (1.4%) who were treated with KEYTRUDA experienced sepsis which led to death, and 3 patients (0.8%) experienced pneumonia which led to death. Adverse reactions leading to interruption of KEYTRUDA occurred in 22% of patients; the most common (≥1%) were liver enzyme increase, diarrhea, urinary tract infection, acute kidney injury, fatigue, joint pain, and pneumonia. Serious adverse reactions occurred in 42% of patients, the most frequent (≥2%) of which were urinary tract infection, hematuria, acute kidney injury, pneumonia, and urosepsis.

In KEYNOTE-045, KEYTRUDA was discontinued due to adverse reactions in 8% of 266 patients with locally advanced or metastatic urothelial carcinoma. The most common adverse reaction resulting in permanent discontinuation of KEYTRUDA was pneumonitis (1.9%). Adverse reactions leading to interruption of KEYTRUDA occurred in 20% of patients; the most common (≥1%) were urinary tract infection (1.5%), diarrhea (1.5%), and colitis (1.1%). The most common adverse reactions (20%) in patients who received KEYTRUDA vs those who received chemotherapy were fatigue (38% vs 56%), musculoskeletal pain (32% vs 27%), pruritus (23% vs 6%), decreased appetite (21% vs 21%), nausea (21% vs 29%), and rash (20% vs 13%). Serious adverse reactions occurred in 39% of KEYTRUDA-treated patients, the most frequent (≥2%) of which were urinary tract infection, pneumonia, anemia, and pneumonitis.

There is limited experience in pediatric patients. Efficacy for pediatric patients was extrapolated from the results in the adult cHL population. In a study of 40 pediatric patients with advanced melanoma, PD-L1–positive advanced, relapsed, or refractory solid tumors or lymphoma, patients were treated with KEYTRUDA for a median of 43 days (range 1-414 days), with 24 patients (60%) receiving treatment for 42 days or more. The safety profile in pediatric patients was similar to that seen in adults treated with KEYTRUDA (pembrolizumab). Toxicities that occurred at a higher rate (≥15% difference) in these patients when compared to adults under 65 years of age were fatigue (45%), vomiting (38%), abdominal pain (28%), hypertransaminasemia (28%), and hyponatremia (18%).

It is not known whether KEYTRUDA is excreted in human milk. Because many drugs are excreted in human milk, instruct women to discontinue nursing during treatment with KEYTRUDA and for 4 months after the final dose.

Our Focus on Cancer

Our goal is to translate breakthrough science into innovative oncology medicines to help people with cancer worldwide. At Merck, helping people fight cancer is our passion and supporting accessibility to our cancer medicines is our commitment. Our focus is on pursuing research in immuno-oncology and we are accelerating every step in the journey – from lab to clinic – to potentially bring new hope to people with cancer.

As part of our focus on cancer, Merck is committed to exploring the potential of immuno-oncology with one of the fastest-growing development programs in the industry. We are currently executing an expansive research program evaluating our anti-PD-1 therapy across more than 30 tumor types. We also continue to strengthen our immuno-oncology portfolio through strategic acquisitions and are prioritizing the development of several promising immunotherapeutic candidates with the potential to improve the treatment of advanced cancers.

For more information about our oncology clinical trials, visit www.merck.com/clinicaltrials.

On October 26, 2017 Cytokinetics, Incorporated (Nasdaq:CYTK) reported total revenues for the third quarter of 2017 were $6.2 million, compared to $59.0 million, during the same period in 2016. Net loss for the third quarter was $32.4 million, or $0.60 per basic and diluted share, respectively, compared to net income for the same period in 2016 of $33.4 million, or $0.84 and $0.77 per basic and diluted share, respectively (Press release, Cytokinetics, OCT 26, 2017, View Source [SID1234521210]). As of September 30, 2017, cash, cash equivalents and investments totaled $308.2 million.

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“We are proud of the key milestones we recently achieved in preparation for the planned release of results from VITALITY-ALS, and potential regulatory filings and commercialization of tirasemtiv in North America and Europe,” said Robert I. Blum, Cytokinetics’ President and Chief Executive Officer. “In the third quarter, we also advanced CK-2127107 into two additional mid-stage clinical trials, one in patients with ALS and another in elderly subjects with limited mobility; we look forward to data from four clinical trials in this program in 2018. Finally, we are pleased that patient enrollment in GALACTIC-HF continues on target and commenced in Japan triggering a $10 million milestone payment to Cytokinetics.”

Recent Highlights and Upcoming Milestones

Skeletal Muscle Program

tirasemtiv (fast skeletal muscle troponin activator)

Completed dosing of patients in VITALITY-ALS (Ventilatory Investigation of Tirasemtiv and Assessment of Longitudinal Indices after Treatment for a Year in ALS), our Phase 3 clinical trial of tirasemtiv in patients with ALS.

Continued enrollment in VIGOR-ALS (Ventilatory Investigations in Global Open-Label Research in ALS), an open-label clinical trial designed to assess the long-term safety and tolerability of tirasemtiv in patients with ALS who have completed participation in VITALITY-ALS.

Conducted clinical, regulatory, non-clinical and other activities intended to support potential regulatory filings and registration of tirasemtiv in North America and Europe.

Conducted manufacturing, logistical planning, market research, market access and other commercial readiness activities intended to support potential registration and commercialization of tirasemtiv in North America and Europe.

Proceeding to collection of final data from VITALITY-ALS and clinical trial database lock in Q4 2017. We plan to conduct analyses of data from VITALITY-ALS and present results from this clinical trial on December 8, 2017 at the 28th International Symposium on ALS/MND in Boston.

Expect to continue to enroll patients who complete VITALITY-ALS into VIGOR-ALS throughout 2017.

CK-2127107 (next-generation fast skeletal muscle troponin activator)

Announced the start of a Phase 1b, double-blind, randomized, placebo-controlled, multiple dose, two-period crossover study to assess the effect of CK-2127107 on measures of physical function in elderly adults with limited mobility. This study is being conducted by Astellas, in collaboration with Cytokinetics.
Announced the start of FORTITUDE-ALS (Functional Outcomes in a Randomized Trial of Investigational Treatment with CK-2127107 to Understand Decline in Endpoints – in ALS). This Phase 2 clinical trial is designed to assess the change from baseline in the percent predicted slow vital capacity (SVC) and other measures of skeletal muscle function after 12 weeks of treatment with CK-2127107 in patients with ALS. This trial is being conducted by Cytokinetics, in collaboration with Astellas.
“Reasons for Screen Failures and Baseline Characteristics of Randomized Patients from the First Cohort of the Phase 2 Clinical Trial of CK-2127107 in Patients with SMA,” presented by Stacy Rudnicki, M.D., Director, Clinical Research, Cytokinetics, at the Cure SMA 2017 Annual SMA Conference in Orlando, FL.
Expect to complete enrollment of Cohort 2 of the Phase 2 clinical trial of CK-2127107 in patients with SMA in 2017.
Expect data from the Phase 2 clinical trial of CK-2127107 in patients with SMA in Q1 2018.
Expect Astellas to continue enrollment in a Phase 2 clinical trial of CK-2127107 in patients with COPD in 2017.
Expect Astellas to continue enrollment in a Phase 1b clinical trial of CK-2127107 in adults with limited mobility in 2017.

Expect to continue enrollment in FORTITUDE-ALS, a Phase 2 clinical trial of CK-2127107 in patients with ALS in 2017.
Cardiac Muscle Program

omecamtiv mecarbil (cardiac muscle myosin activator)

Announced that the Phase 2 clinical trial of omecamtiv mecarbil in Japanese patients with heart failure met its pharmacokinetic primary endpoint and demonstrated statistically significant improvements in systolic ejection time (SET), a secondary endpoint.

Announced that the first patient has been dosed in Japan in GALACTIC-HF (Global Approach to Lowering Adverse Cardiac Outcomes Through Improving Contractility in Heart Failure), the Phase 3 cardiovascular outcomes clinical trial of omecamtiv mecarbil which is being conducted by Amgen, in collaboration with Cytokinetics. Coincident with patient dosing in Japan, Cytokinetics earned a $10 million milestone payment from Amgen.

Announced that additional results from COSMIC-HF (Chronic Oral Study of Myosin Activation to Increase Contractility in Heart Failure), a Phase 2 trial evaluating omecamtiv mecarbil in patients with chronic heart failure, were presented by John Teerlink, M.D., Professor of Clinical Medicine at the University of California San Francisco and Director of Heart Failure at the San Francisco Veterans Affairs Medical Centers in a Rapid Fire Abstracts Presentation at the 21st Annual Heart Failure Society of America Scientific Meeting in Dallas, TX. The results suggest that omecamtiv mecarbil may produce similar results with regard to cardiac function, heart rate, biomarkers and adverse events in patients with ischemic and non-ischemic heart failure due to left ventricular systolic dysfunction.

Continued to enroll patients in GALACTIC-HF, the Phase 3 cardiovascular outcomes clinical trial of omecamtiv mecarbil, conducted by Amgen, in collaboration with Cytokinetics.

Expect continued enrollment of patients with chronic heart failure in GALACTIC-HF throughout 2017.
Pre-Clinical Research

Continued research activities under our joint research program with Amgen directed to the discovery of next-generation cardiac muscle activators and under our joint research program with Astellas directed to the discovery of next-generation skeletal muscle activators. In addition, company scientists continued independent research activities directed to our other muscle biology programs.
Expect to nominate at least 2 compounds from ongoing Research programs (partnered and unpartnered) as potential drug candidates by the end of 2017.
Financials

Revenues for the three and nine months ended September 30, 2017 were $6.2 million and $13.4 million, respectively, compared to $59.0 million and $73.3 million for the corresponding periods in 2016. Revenues for the first nine months of 2017 included the $10 million milestone payment from Amgen as well as $8.8 million of research and development revenues and $6.7 million of license revenues from our collaboration with Astellas and $1.3 million of research and development revenues from our collaboration with Amgen. Revenues for the first nine months of 2017 were offset by $13.8 million (out of the total of $40 million) for payments to Amgen related to our option to co-fund the Phase 3 development program of omecamtiv mecarbil in exchange for an increased royalty upon potential commercialization. Revenues in 2016 were primarily due to license revenue from the September 2016 expansion of our collaboration with Astellas. Astellas paid us $65 million in connection with the expanded collaboration.

Total research and development expenses for the three and nine months ended September 30, 2017 increased to $24.9 million and $64.0 million, respectively, from $17.9 million and $41.1 million for the same periods in 2016, primarily due to increased clinical activity, including activity for VITALITY-ALS and other activities intended to support potential regulatory filings and registration of tirasemtiv in North America and Europe, increased CK-2127107 clinical trials activity, as well as increased personnel.

General and administrative expenses for the three and nine months ended September 30, 2017 increased to $9.7 million and $26.2 million from $7.2 million and $21.1 million for the same periods in 2016, primarily due to increased personnel, non-cash stock compensation expense and commercial readiness activities.

Financial Guidance

The Company also announced updated financial guidance for 2017. The Company anticipates cash research and development expenses will be in the range of $103 to $107 million, cash revenue will be in the range of $16 to $18 million, and cash general and administrative expenses will remain in the range of $30 million to $32 million.

Conference Call and Webcast Information

Members of Cytokinetics’ senior management team will review the company’s third quarter results via a webcast and conference call today at 4:30 PM Eastern Time. The webcast can be accessed through the Investors & Media section of the Cytokinetics website at www.cytokinetics.com. The live audio of the conference call can also be accessed by telephone by dialing either (866) 999-CYTK (2985) (United States and Canada) or (706) 679-3078 (international) and typing in the passcode 46689063.

An archived replay of the webcast will be available via Cytokinetics’ website until November 2, 2017. The replay will also be available via telephone by dialing (855) 859-2056 (United States and Canada) or (404) 537-3406 (international) and typing in the passcode 46689063 from October 26, 2017 at 7:30 PM Eastern Time until November 2, 2017.

On October 26, 2017 4SC AG (4SC, FSE Prime Standard: VSC) reported an interim communication on the nine months ended 30 September 2017 that presents all material developments with a focus on Q3 2017 and provides the Company’s current outlook (Press release, 4SC, OCT 26, 2017, View Source [SID1234521182]). The full communication is available for download on 4SC’s website.
Jason Loveridge, Ph.D., CEO of 4SC, commented:

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"With the conclusion of a successful capital increase generating gross proceeds of ca. EUR 41 million we are now well positioned to reach our stated goals over the next few years: to create significant value for our shareholders by executing on accelerated routes to market for our core cancer products resminostat, 4SC-202 and 4SC-208.

We will continue to enroll patients in our pivotal RESMAIN study of resminostat in cutaneous T-cell lymphoma (CTCL) and are looking forward to the initiation of a Phase II study of resminostat in patients with biliary tract cancer by our Japanese development partner Yakult Honsha Co., Ltd. (Yakult Honsha).

After opening the first clinical center within our SENSITIZE study of 4SC-202 in combination with a checkpoint inhibitor in melanoma patients in Q3 2017, we are anticipating to enroll the first patient in Q4 2017. Furthermore, we are expecting the investigator-initiated Phase II EMERGE study of 4SC-202 in combination with another checkpoint inhibitor in patients with microsatellite-stable gastrointestinal tumors to be initiated in Q1 2018.

Formal preclinical testing of 4SC-208 in order to initiate Phase I clinical evaluation is ongoing according to plan.

Finally, we aim to continue to enhance the value of 4SC and to add to our funds through signing deals with the right industry partners to pursue further development of our non-core assets as we did with the Kv1.3 inhibitors which we recently licensed to Maruho Co., Ltd. (Maruho)."

Key highlights of Q3 2017 and beyond

Ca. EUR 41 million secured from successful capital increase; proceeds forecast to be sufficient to finance 4SC’s accelerated development strategy into 2020
Patient enrollment and opening of study centers well on track for the ongoing pivotal RESMAIN study, which examines the potential of resminostat as maintenance therapy in patients with advanced CTCL
Preclinical data presented on resminostat’s potential to significantly alleviate itching in CTCL patients – one of the major disease burdens
Promising results of a Phase I study of resminostat in combination with S-1 chemotherapy in Japanese patients with biliary tract or pancreatic cancer presented by Yakult Honsha, 4SC’s development partner for resminostat in Japan
Phase Ib/II study SENSITIZE of 4SC-202 in combination with the anti-PD-1 checkpoint inhibitor pembrolizumab (Keytruda(R), Merck) in patients with advanced-stage melanoma initiated with the opening of the first study centers
US composition of matter patent secured for structurally related compounds including 4SC-208; preclinical testing ongoing
Preclinical inhibitors of the Kv1.3 ion channel out-licensed to Maruho in return for up to EUR 208 million in upfront, development and commercial milestones plus single-digit royalties
Business outlook

Continue patient enrollment in the pivotal RESMAIN study of resminostat in CTCL
Yakult Honsha to initiate Phase II study of resminostat in Japanese patients with biliary tract cancer
Enroll patients in the Phase Ib/II study SENSITIZE of 4SC-202 in melanoma
Initiate Phase II investigator-initiated study EMERGE of 4SC-202 in patients with microsatellite-stable gastrointestinal tumors
Continue preclinical testing of 4SC-208 to initiate a Phase I clinical study immediately thereafter
Pursue further licensing deals for non-core assets and continue evaluating potential partnering opportunities with pharmaceutical and biotech companies to progress the clinical development of 4SC’s core pipeline assets
Development of cash balance in Q3 2017 and financial forecast

As of 30 September 2017, 4SC holds cash balance/funds of EUR 43,353 thousand as compared to EUR 4,638 thousand as of 30 June 2017. The increase results from a successful cash capital increase in July with gross proceeds of ca. EUR 41 million. The monthly use of cash from operations was within the range forecasted for 2017 amounting to EUR 739 thousand on average in the first nine months of 2017 (9M 2016 EUR 857 thousand). The decrease in 2017 was mainly driven by the upfront payment from the licensing agreement with Maruho offset by an increase in expenses for the preparation of the Phase Ib/II clinical study SENSITIZE of 4SC-202. The Management Board of 4SC confirms that the proceeds of the capital raise will finance 4SC’s stated goals into 2020.

Conference Call

4SC will not hold a telephone conference along with today’s Q3 2017 Interim Communication. According to 4SC’s policy, the Company will only hold conference calls when there is significant or material newsflow.

Further information

About resminostat

Resminostat is orally administered and potentially offers a novel approach to treating a wide variety of cancers, both as monotherapy and in combination therapy with other anti-cancer drugs. Resminostat inhibits tumor growth and proliferation, causes tumor regression, and strengthens the body’s immune response to cancer.

Resminostat has been shown to be well tolerated in several clinical trials. Resminostat is currently being investigated in a Phase II pivotal study in cutaneous T-cell lymphoma (CTCL) by 4SC. A Phase II study in biliary tract cancer is planned by 4SC’s development partner Yakult Honsha in Japan. Amongst others, resminostat has previously been investigated in biliary tract or pancreatic cancer and hepatocellular carcinoma (HCC).

About 4SC-202

4SC-202 is an orally administered small molecule with a unique mode of action that was designed to strengthen the body’s own anti-tumor immune response, open the tumor microenvironment and encourage infiltration of immune cells into the tumor.

4SC-202 has been investigated in a Phase I study with 24 mostly heavily pretreated patients with several types of highly advanced hematologic cancers, and was proven to be tolerated. Positive signs of anti-tumor efficacy were observed with one complete remission for 28 months and one partial responder for 8 months.

In addition to its therapeutic potential in cancer monotherapy, 4SC is evaluating 4SC-202’s capacity as a partner in combination therapies, specifically in the immuno-oncology area. In this respect, 4SC initiated a Phase Ib/II study of 4SC-202 in combination with the anti-PD-1 checkpoint inhibitor pembrolizumab in patients with advanced-stage melanoma. A second Phase II study of 4SC-202 in combination with the anti-PD-L1 checkpoint inhibitor avelumab, which will be conducted by an academic partner in gastrointestinal cancers, is expected to start soon.

As soon as results from the aforementioned trials will be available, 4SC plans to advance 4SC-202 into a pivotal study in combination with a checkpoint inhibitor in PD-(L)1 refractory patients with advanced Merkel cell carcinoma (MCC).

About 4SC-208

Data from several preclinical in vivo models has established the efficacy of 4SC-208 in inhibiting the Hedgehog/GLI signaling. Inhibition of this signaling pathway has emerged as a highly effective strategy in obstructing the tumorigenic capacity of cancer stem cells, as well as tumor development, proliferation and survival.

Available inhibitors of Hedgehog signaling target the pathway upstream of the transcription factor GLI, whereas 4SC-208 inhibits at the level of GLI and is thus potentially able to avoid the tumor recurrence and relapse observed in response to currently available inhibitors.

4SC believes that 4SC-208 is a promising drug candidate and expects to complete formal preclinical testing in 2018 and to enter into a Phase I/II clinical study immediately thereafter. Cancer indications that are particularly promising are those where resistance to therapies targeting the Hedgehog/GLI pathway are emerging, such as in basal cell carcinoma.

On October 26, 2017 Acceleron Pharma Inc. (NASDAQ:XLRN) reported it will host a webcast and conference call on Tuesday, November 7, 2017 at 8:00 a.m. EST to discuss its third quarter 2017 financial results and provide an update on recent clinical development and corporate activities(Press release, Acceleron Pharma, OCT 26, 2017, View Source [SID1234521191]).

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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 refer to the “Acceleron Third Quarter Earnings Call.”

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