On November 9, 2016 SciClone Pharmaceuticals, reported financial results for the quarter ended September 30, 2016 (Filing, 8-K, SciClone Pharmaceuticals, NOV 9, 2016, View Source [SID1234516725]).

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Revenues: In the third quarter of 2016, SciClone reported revenues of $40.5 million, compared to $42.9 million for the same period in 2015.
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GAAP Diluted EPS: In the third quarter of 2016, SciClone reported GAAP diluted net income per share of $0.19, compared to GAAP diluted net income per share of $0.23 for the same period in 2015.
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Non-GAAP Diluted EPS: In the third quarter of 2016, SciClone reported non-GAAP diluted net income per share of $0.24, compared to $0.26 for the same period in 2015.

Revenues in the third quarter of 2016 were $40.5 million, a $2.4 million or 6% decrease, compared to $42.9 million for the same period in 2015. The decrease in revenue in the third quarter 2016 compared to the same period last year included $1.0 million in revenue related to initial sales of DC Bead recorded in the third quarter of 2015. ZADAXIN revenues were $37.8 million in the third quarter of 2016, a $1.4 million or 3% decrease, compared to $39.2 million for the same period in 2015. The 3% decrease in ZADAXIN revenues for the third quarter of 2016 compared to the same period last year includes a 15% revenue decrease (9% of which was due to a price decrease for ZADAXIN and 6% of which was due to the effects of foreign exchange), partially offset by a 12% increase in ZADAXIN volume sales compared to the same period last year. An agreement with the Company’s exclusive China importer and tier 1 distributer implemented on January 1, 2016, affects a portion of the price decrease which impacts the timing of when SciClone recognizes revenue from sales, but this does not materially impact the total amount of revenue recognized on an annual basis. In the third quarter 2016, ZADAXIN volume sales increased by 12% compared to the same period last year. Promotion services revenues were $1.1 million for the third quarter of 2016, a $0.2 million or 22% increase, compared to $0.9 million in the same period in 2015, reflecting continued strong growth in the Company’s oncology portfolio. For the nine months ended September 30, 2016, revenues were $116.0 million, compared to $114.4 million for the same period last year.

On a GAAP basis, SciClone reported net income in the third quarter of 2016 of $10.1 million, or $0.20 and $0.19 per share on a basic and diluted basis, respectively, compared to net income of $12.0

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million, or $0.24 and $0.23 per share on a basic and diluted basis, respectively, for the same period in 2015. SciClone’s net income for the nine months ended September 30, 2016 was $24.3 million, compared with net income of $16.9 million for the same period in the prior year, or $0.49 and $0.46 per share on a basic and diluted basis, respectively, for the nine months ended September 30, 2016, compared with $0.34 and $0.32 per share on a basic and diluted basis, respectively, for the same period in 2015.

SciClone’s non-GAAP net income in the third quarter of 2016 was $12.7 million, or $0.25 and $0.24 per share on a basic and diluted basis, respectively, compared with non-GAAP net income of $13.4 million, or $0.27 and $0.26 per share on a basic and diluted basis, respectively, for the same period last year. SciClone’s non-GAAP net income for the nine months ended September 30, 2016 was $33.1 million, compared with non-GAAP net income of $36.7 million for the same period in the prior year, or $0.66 and $0.63 per share on a basic and diluted basis, respectively, for the nine months ended September 30, 2016, compared with non-GAAP net income of $0.73 and $0.70 per share on a basic and diluted basis, respectively, for the same period in 2015.

Friedhelm Blobel, PhD, SciClone’s Chief Executive Officer, commented: "We are pleased with our performance in the third quarter and year to date, which is in line with our expectations and reflects the value and continued growth potential of our core business, led by ZADAXIN. ZADAXIN continues to significantly out-perform the growth rate of the China pharmaceuticals market, with double-digit volume growth. The decrease in revenue was in line with our expectations, and predominantly reflects a stabilizing overall growth rate of China’s pharmaceuticals market, in the range of 6%-9%, and pricing pressure at the provincial level. We continue to expect that pricing pressures on revenue in 2016 will be offset, at least in significant part, through sharing of the burden with our China distributor and through our strategies to increase volume. Moreover, we are pleased with the continuing strong cash generation of our business.

"ZADAXIN continues to have significant growth potential as a differentiated, high quality, Western-manufactured brand, and the thymalfasin marketplace demand remains strong. We achieved a major milestone with the initiation and dosing of the first patient in our investigator-initiated clinical trial in sepsis, a major unmet medical need and growth opportunity for ZADAXIN.

"We made considerable progress in advancing our development portfolio. During the third quarter, we announced a regional licensing agreement with Soligenix, Inc, for SGX942, a novel first-in-class therapy being developed for oral mucositis. We also announced that the first patient had been dosed in the Phase 1 proof-of-concept trial of PT-112 in Taiwan, a novel anticancer agent in-licensed from Phosplatin Therapeutics. SGX942 and PT-112 are valuable additions to our development portfolio, offering opportunities to participate in the Chinese Class 1 regulatory pathway including local manufacturing, and with the potential to meaningfully expand our oncology business in China and adjacent markets for the future.

"The healthcare reform movement in China continues to offer opportunities for SciClone to grow our marketed product portfolio and to advance our development pipeline of high quality, differentiated medicines. We remain confident about our prospects for near-term growth and maximizing long-term value creation."

For the third quarter of 2016, sales and marketing (S&M) expenses were $13.3 million, compared with $15.1 million for the same period in 2015. The decrease in S&M for the third quarter of 2016,

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compared to the same period in 2015, is primarily related to decreases in sales and marketing events and lower DC Bead-related launch costs. For the nine months ended September 30, 2016, S&M expenses were $40.1 million, compared with $39.7 million, for the same period last year.

For the third quarter of 2016, research and development (R&D) expenses were $3.3 million, compared with $1.0 million of R&D expenses for the same period of 2015. For the third quarter of 2016 and 2015, we recorded $0.3 million and zero, respectively, related to in-license arrangements with certain licensees and $2.8 million and $1.0 million, respectively, related to R&D expenses for clinical and preclinical R&D activities with certain licensees. For the nine months ended September 30, 2016, R&D expenses were $9.5 million, compared with $8.7 million, for the same period last year.

For the third quarter of 2016, general and administrative (G&A) expenses were $7.9 million, compared with $7.3 million for the same period in 2015. For the nine months ended September 30, 2016, G&A expenses were $23.5 million, compared with $20.8 million for the same period last year. G&A was higher for both the third quarter and nine-month periods of 2016, compared to the same periods of 2015, related to legal costs in connection with the Company’s ongoing strategic review and stock-based compensation expenses.

For the third quarter of 2016, SciClone’s income tax expense was $1.1 million, compared with $0.6 million for the same period in 2015. Income tax expense was lower in the third quarter of 2015 related to the restructuring of the Company’s China business. For the nine months ended September 30, 2016, income tax expense was $2.6 million, compared with $0.6 million, for the same period last year, and included a $1.3 million uncertain tax provision for our China operations from 2013 to 2015.

As of September 30, 2016, cash and cash equivalents totaled $130.1 million, compared to $101.4 million as of December 31, 2015, excluding the $12.8 million of restricted cash held in escrow as of December 31, 2015 for the SEC settlement which was released and paid in February 2016.

SciClone has presented non-GAAP information above as the Company believes this non-GAAP information is useful for investors, taken in conjunction with SciClone’s GAAP financial statements, because management uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of SciClone’s operating results as reported under GAAP. The non-GAAP calculations and reconciliation are provided in the accompanying table titled "Reconciliation of GAAP to Non-GAAP Net Income" except that for the non-GAAP EPS referenced in "2016 Non-GAAP Earnings Guidance Revised Upward" below, the Company is unable to provide a quantitative reconciliation of its forward-looking estimate of non-GAAP EPS to a forward-looking estimate of GAAP EPS because certain information needed to make a reasonable forward-looking estimate of GAAP EPS for the full fiscal year 2016 is difficult to predict and estimate and is often dependent on future events which may be uncertain or outside of the Company’s control, for example, milestone payments.

2016 Non-GAAP Earnings Guidance Revised Upward

Based on the continued volume growth of ZADAXIN and implementation of effective operating cost controls, SciClone is revising upwards its projected non-GAAP earnings per share on a fully diluted basis to be in the range of $0.78 to $0.82, up from the previously expected range of $0.70 to $0.74 for

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the year. The Company continues to project its 2016 revenue to be in the range of $158 million to $163 million.

The Company’s outlook for 2016 continues to be influenced by several factors, including the overall growth rate of the China pharmaceuticals market, anticipated pricing pressure at the provincial level and higher R&D expenses as it continues to advance its pipeline products toward commercialization. The Company further expects that pricing pressures on revenue in 2016 will be offset, at least in significant part, through sharing of the burden with its China distributors and potentially through volume increases.


On November 9, 2016 Immune Design (Nasdaq:IMDZ), a clinical-stage immunotherapy company focused on oncology, reported financial results and a corporate update for the third quarter ended September 30, 2016 (Press release, Immune Design, NOV 9, 2016, View Source [SID1234516561]).

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"During the third quarter, we continued enrollment of our clinical programs, recruited senior leadership with late-stage oncology development expertise, and advanced the range of future potential products from our differentiated ZVex platform," said Carlos Paya, M.D., Ph.D., President and Chief Executive Officer of Immune Design. "Backed by both new and existing investors who participated in our recent financing, we are focused on delivering meaningful results in both of our approaches in 2017."

Recent Highlights

Product Development: Continued progress on all programs from ZVex and GLAASTM platforms

Antigen Specific: CMB305 Program

CMB305, the novel prime-boost NY-ESO-1 cancer vaccine using the ZVex platform, is being evaluated in soft tissue sarcoma (STS) patients both as a potential monotherapy and in combination with an anti-PD-L1 antibody.
CMB305 monotherapy:
Follow-up continues on the two fully enrolled monotherapy Phase 1 trials (CMB305; n=24 patients, and its vector-only component, LV305; n=23 patients). As reported by investigators, at the end of the third quarter:
The safety profile remains favorable, with a consistent rate of NY-ESO-1-triggered T cell responses that appear stronger with CMB305.
The median overall survival (OS) has still not been reached in either study, with CMB305 and LV305 having a median follow-up of approximately 221 days and 640 days, respectively. Chemotherapeutic agents approved to treat metastatic STS have shown a median OS of 12.4-13.5 months.
CMB305 in combination with TECENTRIQ (atezolizumab): Enrollment continues in this randomized 80 patient, Phase 2 study comparing CMB305 plus atezolizumab vs. atezolizumab alone, pursuant to a collaboration with Genentech.
Immune Design intends to submit data for presentation from the CMB305 studies beginning at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) annual meeting in 2017 (ASCO 2017).
Antigen Agnostic: G100 Program

G100, the formulated TLR4 synthetic agonist from the GLAAS platform, GLA-SE, injected intratumorally, is being evaluated in an ongoing randomized Phase 2 trial in patients with follicular non-Hodgkin lymphoma (fNHL). Patients receive either G100 and low-dose radiation (RadRx) or G100 and low-dose RadRx with the systemic administration of the anti-PD-1 antibody, Keytruda (pembrolizumab), pursuant to a collaboration with Merck. In contrast with CMB305’s focus on OS, the initial endpoint focus for this study is on response rates in both treated and distal, non-treated lesions.
Immune Design intends to submit data from this Phase 2 study for presentation beginning at ASCO (Free ASCO Whitepaper) 2017.
Expansion of the versatility of the ZVex platform and further support for ongoing product development: upcoming presentations at SITC (Free SITC Whitepaper) and ASH (Free ASH Whitepaper)

To avoid potential antigenic competition and to induce an immune response to multiple antigens that are co-delivered to dendritic cells, Immune Design has further developed the ZVex platform to enable the delivery of multiple RNA genes to dendritic cells to induce a simultaneous T cell response against each, separate antigen. The company intends to include this new feature in its planned next generation of product candidates, ZVex2.0, which will be designed to deliver both multiple conserved antigens and/or neo-antigens, in the latter case, distinct from ZVexNeo and the collaboration with Gritstone Oncology.
A preclinical prototype from this evolution of the ZVex platform will be presented at the upcoming SITC (Free SITC Whitepaper) annual meeting, as well as a presentation illustrating preclinical data from a new prime-boost option coupling a ZVex vector with an alternate boost modality. Also, at the ASH (Free ASH Whitepaper) 2016 annual meeting, Immune Design will present additional preclinical data describing the synergy of G100 with local radiation to eradicate lymphomas, further supporting its ongoing G100 Phase 2 study in fNHL.
Expansion of the Senior Leadership Team

Sergey Yurasov, M.D., Ph.D. Joins Executive Team: Addition of Late-Stage Oncology Development Expertise

Dr. Sergey Yurasov joined the Immune Design team as Senior Vice President of Clinical Development and Chief Medical Officer in October 2016. Dr. Yurasov brings more than 20 years’ experience in immunology and late-stage oncology drug development to the company.
Acquisition of Intellectual Property Rights and Settlement of Litigation and Patent Challenge

On October 21, 2016, Immune Design announced the acquisition of intellectual property rights from, and settlement of outstanding legal proceedings with, Theravectys SA (TVS). Immune Design obtained a license to certain present and future intellectual property of TVS related to the company’s ZVex platform, and resolved all outstanding proceedings in Delaware and Belgium and a patent opposition proceeding brought by TVS against one of the company’s patents related to ZVex. Please refer to Immune Design’s Current Report on Form 8-K filed on October 21, 2016 for a more complete description of the terms.
Completion of Follow-On Financing

In September 2016, Immune Design completed an underwritten follow-on public offering, which resulted in the sale of 5,226,369 shares of common stock, at a price of $6.25 per share. Net proceeds from the offering were $30.3 million after deducting underwriting discounts, commissions and estimated expenses. Both new and existing investors participated in the offering.
Financial Results

Third Quarter

Immune Design ended the third quarter of 2016 with $112.5 million in cash, cash equivalents and short-term investments, compared to $112.9 million as of December 31, 2015. Net cash used in operations for the nine months ended September 30, 2016 was $31.4 million and $10.9 million for the three months ended September 30, 2016.
Net loss and net loss per share for the third quarter of 2016 were $12.4 million and $0.60, respectively, compared to $7.4 million and $0.37, respectively, for the third quarter of 2015.
Revenue for the third quarter of 2016 was $8.2 million and was attributable primarily to $7.0 million in license revenue associated with Immune Design’s collaboration with Sanofi, $0.4 million in product sales to collaboration partner Sanofi, and $0.8 million in collaboration revenue associated with the Sanofi G103 (HSV2 therapeutic vaccine) collaboration. Revenue for the third quarter of 2015 was $4.7 million and was attributable primarily to $3.5 million in license revenue associated with Immune Design’s collaboration with Sanofi, $0.8 million in product sales to collaboration partners MedImmune and Sanofi, and $0.3 million in collaboration revenue associated with the Sanofi G103 (HSV2 therapeutic vaccine) collaboration.
Research and development expenses for the third quarter of 2016 were $11.2 million, compared to $8.3 million for the third quarter of 2015. The $2.9 million increase was primarily attributable to continuing advancement of Immune Design’s ongoing research and development programs, including ongoing Phase 1 and Phase 2 clinical trials.
General and administrative expenses for the third quarter of 2016 were $9.6 million, compared to $3.5 million for the third quarter of 2015. The $6.1 million increase was primarily attributable to the settlement and license agreements with TVS involving the acquisition of certain present and future intellectual property rights from TVS and resolving the litigation initiated by TVS in July 2014 against the Company, as well as related claims and counterclaims.
Year-to-Date

Net loss and net loss per share for the nine months ended September 30, 2016 were $39.1 million and $1.92, respectively, compared to $27.3 million and $1.45, respectively, for the same period in 2015.
Revenue for the nine months ended September 30, 2016 was $11.2 million and was attributable primarily to $7.0 million in license revenue associated with Immune Design’s collaboration with Sanofi, $1.2 million in product sales to collaboration partner Sanofi, and $3.0 million in collaboration revenue associated with the Sanofi G103 (HSV2 therapeutic vaccine) collaboration. Revenue for the nine months ended September 30, 2015 was $8.4 million and was attributable primarily to $3.5 million in license revenue associated with Immune Design’s collaboration with Sanofi, $0.9 million in product sales to collaboration partners MedImmune and Sanofi, and $3.9 million in collaboration revenue associated with the Sanofi G103 (HSV2 therapeutic vaccine) collaboration.
Research and development expenses for the nine months ended September 30, 2016 were $33.1 million compared to $24.2 million for the same period in 2015. The $8.9 million increase was primarily attributable to continuing advancement of Immune Design’s ongoing research and development programs, including ongoing Phase 1 and Phase 2 clinical trials and an increase in personnel-related expenses to support the company’s advancing research and clinical pipeline.

General and administrative expenses for the nine months ended September 30, 2016 were $17.4 million, compared to $11.1 million for the same period in 2015. The $6.3 million increase was primarily attributable to the settlement and license agreements with TVS entered into in October 2016 involving the acquisition of certain present and future intellectual property rights from TVS and resolving the litigation initiated by TVS in July 2014 against the Company, as well as related claims and counterclaims.

On November 9, 2016 Sophiris Bio Inc. (NASDAQ: SPHS) (the "Company" or "Sophiris"), a biopharmaceutical company developing topsalysin (PRX302) for the treatment of urological diseases, reported financial results for the three and nine months ended September 30, 2016 (Press release, Sophiris Bio, NOV 9, 2016, View Source [SID1234516726]).

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Business Highlights:

On August 26, 2016, the Company announced the closing of a public offering in which the Company raised net proceeds of $27.4 million. The Company plans to use the proceeds from this offering to fund a Phase 2b clinical trial for the treatment of localized prostate cancer and working capital and general corporate purposes, which may include research and development expenses, general and administrative expenses and manufacturing expenses.
During the third quarter of 2016, the Company received proceeds of $1.7 million from the exercise of warrants and stock options.
In September 2016, the Company repaid the outstanding principal balance of the loan with Oxford Finance LLC with a total payment of $4.2 million.
On October 12, 2016 the Board of Directors of Sophiris Bio Inc. approved the appointment of Allison Hulme, Ph.D., the Company’s chief operating officer and head of research and development, as a director of the Company.
"Sophiris has been successful in building on a series of positive clinical milestones that we believe will enable us to further the development of topsalysin," said Randall Woods, president and CEO of Sophiris Bio. "In the wake of announcing positive data from our Phase 2a proof-of-concept study in localized prostate cancer as well as from our Phase 3 trial in BPH that met its primary endpoint, the Company was able to raise additional funds in the public market in the third quarter to strengthen our balance sheet and enable us to fund an additional clinical trial. Over the past quarter, we have made significant progress in preparing to initiate a Phase 2b clinical trial of topsalysin for the treatment of localized prostate cancer, which is expected to report initial results by the end of 2017."

Financial Results:

At September 30, 2016, we had cash, cash equivalents and securities available-for-sale of $31.3 million and net working capital of $29.8 million. We expect that our cash and cash equivalents will be sufficient to fund our operations into the second quarter of 2018. At this point in time we do not plan on pursuing a second Phase 3 trial in BPH unless we obtain additional financing.

For the three months ended September 30, 2016

The Company reported a net loss of $4.3 million ($0.17 per share) for the three months ended September 30, 2016 compared to a net loss of $3.7 million ($0.22 per share) for the three months ended September 30, 2015.

Research and development expenses

Research and development expenses were $0.6 million for the three months ended September 30, 2016, compared to $2.6 million for the three months ended September 30, 2015. The decrease in research and development costs are primarily attributable to a decrease in the costs associated with the Company’s Phase 3 PLUS-1 clinical trial and our Phase 2a proof of concept clinical trial for localized prostate cancer both of which were completed prior to the third quarter.

General and administrative expenses

General and administrative expenses were $3.0 million for the three months ended September 30, 2016 compared to $0.9 million for the three months ended September 30, 2015. The increase is primarily due to the inclusion of $1.4 million in offering expenses which were allocated to the fair value of the warrants issued in our public offering in August 2016. The balance of the offering expenses were recorded as a reduction to equity. The increase was also related to an increase in personnel related costs and professional services.

Loss on revaluation of warrant liability.

Loss on revaluation of the warrant liability was $0.3 million for the three months ended September 30, 2016. The non-cash loss is associated with the change in the fair value of our warrant liability.

For the nine months ended September 30, 2016

The Company reported a net loss of $10.6 million ($0.51 per share) for the nine months ended September 30, 2016 compared to a net loss of $11.7 million ($0.69 per share) for the nine months ended September 30, 2015.

Research and development expenses

Research and development expenses were $2.5 million for the nine months ended September 30, 2016 compared to $8.2 million for the nine months ended September 30, 2015. The decrease in research and development costs are primarily attributable to a decrease of $5.2 million in the costs associated with the Company’s completed Phase 3 PLUS-1 clinical trial of topsalysin for the treatment of BPH and to a lesser extent a decrease in costs associated with our Phase 2a proof of concept clinical trial for localized prostate cancer and manufacturing activities for topsalysin.

General and administrative expenses

General and administrative expenses were $5.6 million for the nine months ended September 30, 2016 compared to $3.0 million for the nine months ended September 30, 2015. The increase is primarily due to the inclusion of $1.6 million in offering costs which were allocated to the warrants issued in connection with our offerings which closed in May and August of 2016. The increase, to a lesser extent, is due to an increase in personnel, legal, accounting, consulting and professional services. These increases were partially offset by a decrease in non-cash stock-based compensation expense.

Loss on revaluation of warrant liability.

Loss on revaluation of the warrant liability was $2.0 million for the nine months ended September 30, 2016. The non-cash loss is associated with the change in the fair value of our warrant liability.

On November 9, 2016 Endocyte, Inc. (NASDAQ:ECYT), a leader in developing targeted small molecule drug conjugates (SMDCs) and companion imaging agents for personalized therapy, reported financial results for the third quarter ending September 30, 2016, and provided a clinical and business update (Press release, Endocyte, NOV 9, 2016, View Source [SID1234516520]).

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"Our clinical pipeline made critical progress during the quarter as we have moved both lead SMDC product candidates, EC1456 and EC1169, into the expansion phases of their trials, and confirmed the maximum clinical doses for each," commented Mike Sherman, president and CEO at Endocyte. "We are focused on accelerating progress of both trials to assess the performance of these therapeutic SMDCs along with their companion imaging agents in the targeted indications, and look forward to reporting data on both product candidates at medical conferences in the first half of 2017."

"Key unmet medical needs remain in both prostate cancer and non-small cell lung cancer (NSCLC), which we hope to address with our lead SMDCs. Prostate cancer patients who progress following hormone therapy remain difficult to treat and many NSCLC patients do not respond to immuno-oncology agents and other therapies," commented Alison A. Armour , MD, chief medical officer of Endocyte. "During the EC1169 dose-escalation, we were pleased to see total tumor burden reduction in four out of six patients with measurable disease treated at higher doses, along with our first confirmed RECIST partial tumor response."

EC1169 (PSMA-tubulysin)

Data from the dose escalation phase of the EC1169 trial reported at ESMO (Free ESMO Whitepaper) in October showed that total target tumor burden reduction was observed in 4 of the 6 patients with measurable soft tissue disease treated at doses of 3.8 mg/m2 and higher.
One of these patients demonstrated the first confirmed radiologic partial tumor response (PR) as measured by RECIST 1.1 criteria.
Two patients demonstrated confirmed prostate specific antigen reductions of greater than 50%, one of whom went on to demonstrate the PR.
EC1169 was well tolerated without causing dose-limiting hematologic toxicity frequently associated with traditional chemotherapy. Primary toxicities included fatigue and gastrointestinal (GI) toxicity; predominantly grade 1 and 2, reversible and responsive to simple medication.
The company has confirmed 6.5 mg/m2 once per week, administered 2 weeks out of a 3 week cycle, as the maximum clinical dose and is moving into the expansion phase where 2 cohorts of metastatic castration resistant prostate cancer (mCRPC) patients will be evaluated. One cohort will include patients who previously received a taxane-based therapy and the other cohort will include taxane-naïve patients. Initial patients in this expansion phase have consented to participate and are expected to be treated this month.
EC1456 (Folate-tubulysin)

A dose of 6.0 mg/ m2 was established as the maximum twice per week dose, administered 2 weeks out of a 3 week cycle, which is being used in the expansion phase of the trial where the company will evaluate EC1456 in select folate receptor (FR)-positive NSCLC patients, identified by the companion imaging agent etarfolatide.
Patients included in this phase of the trial will have received first-line chemotherapy and may have also been treated with anti-PD-1 therapy.
EC1456 was well tolerated during dose escalation, with primary toxicities including fatigue, GI toxicity, and electrolyte disturbance; predominantly grade 1 and 2, reversible and responsive to simple medication.
In spite of the inclusion of patients in the dose escalation phase who were not selected as positive for the targeted FR, most patients demonstrated stable disease as best response and several patients demonstrated a reduction in target tumor volume.
Upcoming Expected Milestones for the First Half of 2017

Efficacy and safety data from expansion cohorts for both EC1456 and EC1169 are expected to be reported at medical conferences.
Data from an EC1456 surgical debulking study. This study is designed to assess various metrics related to cell targeting and intratumoral delivery of drug payload.
Data from an EC1169 receptor occupancy study. This study is designed to provide insight into the drug’s interaction with the target receptor.
New pre-clinical data on the CAR-T program are expected to be reported at a scientific conference.
Third Quarter 2016 Financial Results

Endocyte reported a net loss of $8.7 million, or $0.21 per basic and diluted share, for the third quarter of 2016, compared to a net loss of $10.0 million, or $0.24 per basic and diluted share for the same period in 2015.

Research and development expenses were $6.0 million for the third quarter of 2016, compared to $6.6 million for the same period in 2015. The decrease was primarily attributable to a decrease in compensation expense and a decrease in expenses related to the TARGET trial, which is now complete. The net effect of these decreases was partially offset by increases related to the EC1456 and EC1169 dose escalation trials and increases in manufacturing and other research expenses related to EC1456 and EC1169.

General and administrative expenses were $3.0 million for the third quarter of 2016, compared to $3.8 million for the same period in 2015. The decrease was primarily attributable to a decrease in compensation expense and a decrease in expenses related to professional fees and employee benefits.

Cash, cash equivalents and investments were $146.7 million at September 30, 2016, compared to $180.3 million at September 30, 2015, and $173.6 million at December 31, 2015.

Financial Expectations

The company updated its financial expectations and now anticipates its cash balance at the end of 2016 to be above $135 million.

About EC1456 and the Phase 1 Trial

EC1456 is an investigational therapeutic SMDC constructed of a high affinity FR-targeting ligand conjugated through a spacer and bioreleasable linker system to a potent cytotoxic microtubule inhibitor, TubBH. Patient FR-status will be determined using the investigational companion imaging agent, etarfolatide. EC1456 and etarfolatide are currently being evaluated in a phase 1 study in patients with advanced solid tumors (ClinicalTrials.gov Identifier: NCT01999738).

The open-label, multicenter, non-randomized, study is divided into two parts. The first part of the study was designed to determine the maximum clinical dose and recommended Phase 2 dose of EC1456 in patients with metastatic or locally advanced solid tumors.

Endocyte has now initiated the expansion phase of the study which is designed to evaluate the efficacy of EC1456 in patients with NSCLC known to express the FR and treated with the maximum clinical dose of EC1456. The twice weekly (BIW) dosing schedule at a 6.0 mg/m2 dose will be evaluated and then upon completion of this dosing schedule, additional patients will be enrolled in a once per week dosing schedule cohort. Single agent anti-tumor response will be evaluated, which will inform and may trigger additional work in combination therapies and indications such as triple-negative breast cancer, ovarian cancer and endometrial cancer.

About EC1169 and the Phase 1 Trial

EC1169 is an investigational therapeutic SMDC constructed of a high affinity prostate specific membrane antigen (PSMA)-targeting ligand conjugated through a bioreleasable linker system to a potent microtubule inhibitor, tubulysin B hydrazide (TubBH). Patient PSMA-status will be determined using the investigational companion imaging agent, EC0652. EC1169 and EC0652 are currently being evaluated in a phase 1 study in patients with mCRPC (ClinicalTrials.gov Identifier: NCT02202447).

The open-label, multicenter, non-randomized, study is divided into two parts. The first part of the study, now complete, was designed to determine the maximum clinical dose and recommended Phase 2 dose of EC1169 in patients with prostate cancer.

Endocyte has now initiated the second part of the study which is designed to evaluate the efficacy of EC1169 in taxane-exposed and taxane-naïve mCRPC, with a primary study endpoint of radiographic progression free survival in patients selected as PSMA-positive.

On November 9, 2016 Infinity Pharmaceuticals, Inc. (NASDAQ: INFI) reported its third quarter 2016 financial results and its transition of the company to focus on IPI-549, a potentially first-in-class immuno-oncology product candidate that selectively inhibits PI3K-gamma. IPI-549 is the first and only PI3K-gamma inhibitor in clinical development (Press release, Infinity Pharmaceuticals, NOV 9, 2016, View Source;p=RssLanding&cat=news&id=2221099 [SID1234516562]). In October, Infinity licensed duvelisib, an investigational, oral, dual inhibitor of phosphoinositide-3-kinase (PI3K)-delta and PI3K-gamma, to Verastem, Inc.

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"During the third quarter, we undertook a number of important initiatives to focus Infinity on the advancement of IPI-549, a promising novel approach to targeting the immune-suppressive tumor microenvironment," stated Adelene Perkins, president and chief executive officer. "Refocusing Infinity required a significant organizational restructuring, an amendment to our license agreement from Takeda for both duvelisib and IPI-549, and the license of duvelisib to Verastem. We are pleased that Verastem will now be advancing duvelisib for patients and our corporate imperative going forward is to maximize the value of IPI-549."

"We are encouraged by the initial IPI-549 clinical monotherapy data recently presented, and we expect to begin evaluating IPI-549 in combination with Opdivo, a PD-1 immune checkpoint inhibitor, this fall. We anticipate reporting updated Phase 1 data from the Phase 1 study in the first half of 2017. Data in two recent Nature publications provide a strong rationale for advancing IPI-549 and show that IPI-549 in combination with immune checkpoint inhibitors may overcome resistance to checkpoint blockade," Ms. Perkins continued.

Recent developments include the following:

IPI-549

Entered clinical collaboration with BMS to evaluate IPI-549 in combination with Opdivo: Earlier today, Infinity and Bristol-Myers Squibb announced a clinical trial collaboration to evaluate IPI-549 in combination with Bristol-Myers Squibb’s Opdivo (nivolumab) in patients with advanced solid tumors. The dose-escalation portion exploring IPI-549 as a monotherapy in Infinity’s Phase 1 study is continuing, and the first dose-escalation cohort studying IPI-549 in combination with Opdivo is expected to begin this fall.
The ongoing Phase 1 clinical study of IPI-549 is designed to explore the activity, safety, tolerability, pharmacokinetics and pharmacodynamics of IPI-549 as a monotherapy and in combination with Opdivo in approximately 175 patients with advanced solid tumors. Once the dose-escalation phase evaluating IPI-549 plus Opdivo is completed, an expansion phase is planned to evaluate the combination in patients with selected solid tumors, including non-small cell lung cancer (NSCLC), melanoma and squamous cell carcinoma of the head and neck (SCCHN).

Initial clinical data presented at AACR (Free AACR Whitepaper) cancer immuno-therapy conference: In September, Infinity announced initial clinical data for IPI-549. Preliminary Phase 1 results from nine patients with advanced solid tumors showed that the safety, pharmacokinetics and pharmacodynamics of IPI-549 monotherapy treatment appeared favorable. These data were presented in a poster session at the Second CRI-CIMT-EATI-AACR International Cancer Immunotherapy Conference (CIMT) (Free CIMT Whitepaper): Translating Science into Survival.1
Preclinical data on IPI-549 published in two Nature articles: Earlier today, Infinity announced the publication of new findings by research collaborators, including Drs. Jedd Wolchok and Taha Merghoub at Memorial Sloan Kettering Cancer Center, and Infinity scientists in the November 9 online issue of Nature. The paper, entitled "Overcoming resistance to checkpoint blockade by targeting PI3K-gamma in tumor-infiltrating myeloid cells," 2 describes research showing that the presence of suppressive myeloid cells play a critical role in tumor resistance to checkpoint inhibitors and that IPI-549 is able to help recover sensitivity to checkpoint inhibition in this setting by remodeling the immune-suppressive tumor microenvironment primarily through its effects on myeloid cells.
In September, Infinity announced the first Nature publication on PI3K-gamma by research collaborators, including Dr. Judith Varner, at University of California San Diego School of Medicine and Moores Cancer Center and Infinity scientists in the September 19 online issue of Nature. The paper, entitled "PI3K-gamma is a molecular switch that controls immune suppression," 3 describes preclinical data showing that macrophage PI3K-gamma signaling promotes immune suppression by inhibiting activation of anti-tumor T cells. Additionally, blocking PI3K-gamma activated the immune response and significantly suppressed growth of implanted tumors in animal models. Inhibiting PI3K-gamma also boosted sensitivity of some tumors to existing anti-cancer drugs and showed synergy with existing immuno-therapies.

These two articles will publish back-to-back in the November 17, 2016, print edition of Nature. Taken together, these findings reinforce the therapeutic potential of IPI-549 to alter the immune-suppressive microenvironment, promoting an anti-tumor immune response that may lead to tumor growth inhibition and providing a strong rationale for the ongoing Phase 1 study.

Corporate

Amended license of duvelisib from Takeda: In September, Infinity amended its agreement with Takeda for the license of duvelisib and IPI-549. Under the amended agreement with Takeda, upon entry into the Verastem Agreement, Infinity’s milestone obligations for its first licensed compound (duvelisib) were terminated and deemed satisfied. In exchange, Infinity and Takeda will share equally in potential future royalties on net sales of duvelisib that Infinity is eligible to receive from Verastem. Additionally by satisfying milestone obligations on duvelisib under the Takeda license, IPI-549 now qualifies for the lower milestone obligations of the second licensed compound. As a result, Infinity’s potential regulatory milestone payments to Takeda related to IPI-549 have been reduced by up to $120 million, from up to $170 million to up to $50 million. Development milestones of $5.0 million, as well as potential commercial milestones, remain unchanged by the amendment.
Duvelisib licensed to Verastem: In November, Infinity and Verastem announced that the companies entered into a license agreement for exclusive worldwide rights to develop and commercialize duvelisib. Under the agreement, Infinity is eligible to receive up to a total of $28 million across two milestone payments: $6.0 million upon positive data from the Phase 3 DUO study in patients with relapsed/refractory chronic lymphocytic leukemia, and $22 million upon the first regulatory approval of duvelisib inside or outside of the U.S. Verastem is also obligated to pay Infinity tiered mid-to-high single-digit royalties on net sales of duvelisib and will be responsible for the royalties on net sales of duvelisib owed by Infinity to Mundipharma International Corporation Limited and Purdue Pharmaceutical Products L.P.
Reduced facility lease commitments: In November, Infinity and Alexandria Real Estate Equities (ARE) entered into an agreement to terminate Infinity’s lease for its facilities at 780 Memorial Drive in Cambridge, MA, effective as of October 31, 2016. In connection with the termination, Infinity paid ARE a termination payment of approximately $1.8 million. Infinity elected to terminate its lease to consolidate its facilities as part of its strategic restructuring efforts.
Third Quarter 2016 Financial Results

At September, 2016, Infinity had total cash, cash equivalents and available-for-sale securities of $112.3 million, compared to $146.4 million at June 30, 2016.
Infinity did not record any revenue during the third quarter of 2016. Revenue for the third quarter of 2015 was $90.7 million for research and development (R&D) services associated with the previous collaboration with AbbVie for duvelisib in oncology.
R&D expense for the third quarter of 2016 was $12.8 million compared to $37.7 million for the same period in 2015. The decrease in R&D expense was primarily related to a decrease in activities for duvelisib and a decrease in compensation as a result of the restructuring announced earlier this year.
General and administrative (G&A) expense was $7.1 million for the third quarter of 2016, compared to $9.8 million for the same period in 2015. The decrease in G&A expense was primarily related a decrease in commercial-readiness activities for duvelisib.
Net loss for the third quarter of 2016 was $19.5 million, or a basic and diluted earnings per common share of $0.39, compared to a net income of $42.5 million, or a basic earnings per common share of $0.85 and diluted earnings per common share of $0.84, for the same period in 2015.
Cash and Investments Outlook
Following the license agreement with Verastem and further restructuring activities, Infinity today provided an update on its anticipated year-end 2016 cash and investments balance and expected cash runway.

Infinity expects to end 2016 with a year-end cash and investments balance ranging from $70 million to $80 million, compared to prior expectations of $45 million to $55 million.
Infinity expects that its existing cash, cash equivalents and available-for-sale securities at September 30, 2016, will be adequate to satisfy the company’s capital needs into the first quarter of 2018 based on its current operational plans, compared to previous guidance of cash runway into the third quarter of 2017.
The company’s updated financial guidance is in the absence of additional funding or business development activities and has expenses related to duvelisib beyond November 1, 2016, capped at $4.5 million. Additionally, Infinity’s updated cash runway expectation excludes any potential milestone payments from Verastem related to duvelisib.