On May 10, 2017 Galena Biopharma, Inc. (NASDAQ: GALE), a biopharmaceutical company developing hematology and oncology therapeutics that address unmet medical needs, reported its financial results for the quarter ended March 31, 2017 (Filing, Q1, Galena Biopharma, 2017, MAY 10, 2017, View Source [SID1234519040]).

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"In the first quarter of 2017, we initiated a strategic assessment of Galena to examine a variety of options for optimizing value for the Company and our shareholders," said Stephen F. Ghiglieri, Interim Chief Executive Officer and Chief Financial Officer. "As announced, we hired Canaccord Genuity to assist us in the process, and we are now actively exploring several potential opportunities, from monetizing some or all of our clinical development programs through a license or sale of the assets, to a complete transformation of the Company via a sale, merger, reverse merger, or business combination with another company, as well as combinations of these strategies."

"As we pursue potential strategic options for Galena, we are also striving to remove outstanding challenges facing the organization. We are pleased that we have put two significant legal issues behind us through the announced resolution with the Securities and Exchange Commission, and we have also reached an oral agreement in principle with the U.S. Attorney’s Office for the District of New Jersey (USAO NJ) and the Department of Justice (DOJ) for a non-criminal resolution and civil payment. The resolution of these matters will significantly reduce the associated litigation expenses as we continue to conserve working capital, and it also removes a significant distraction to the Company, allowing the management team to focus our efforts and resources on executing a positive outcome to the strategic review process," added Mr. Ghiglieri.

Mr. Ghiglieri concluded, "Over the last few months, our clinical programs brought additional positive news to the Company. We obtained positive recommendations from the data safety monitoring board for continuation of both NeuVax (nelipepimut-S) investigator-sponsored breast cancer combination trials with trastuzumab, and we look forward to completion of enrollment in those trials and the interim efficacy readout from the HER2 1+/2+ trial late this year. We also had two positive data presentations at major medical conferences: one on the interim safety data for NeuVax in our HER2 3+ trial, and the second on the final results from the GALE-301 (E39) Phase 1/2a clinical trial. Our clinical team also continues work to prepare our GALE-401 asset for initiation of a Phase 3 trial in essential thrombocythemia with a current goal of enabling enrollment of the first patient late this year."

1

FINANCIAL REVIEW

Operations

During the three months ended March 31, 2017, operating loss was $5.1 million, including $0.2 million in non-cash stock-based compensation, compared to $9.0 million, including $0.7 million in non-cash stock-based compensation for the same period in 2016. Galena’s development programs and general and administrative expenses are classified as continuing operations. Loss from continuing operations was $2.3 million for the first quarter of 2017, or $0.09 per basic and diluted share, including $2.8 million of non-operating income; compared to $13.1 million for the first quarter of 2016, or $1.46 per basic and diluted share, including $4.1 million of non-operating expense.
Net non-operating income (expense) is primarily driven by changes in the estimated fair value of warrants accounted for as liabilities and the contingent purchase price liability that are reflected as non-cash gains and losses in the consolidated financial statements. Net non-operating income (expense) can be broken down as follows:
•
$3.9 million gain for the first quarter of 2017 due to the significant decrease in the estimated fair value of warrants accounted for as liabilities compared to a $3.9 million loss during the same period in 2016.
•
$1.0 million of interest expense for the first quarter of 2017 compared to $0.1 million of interest expense during the same period in 2016.
•
$0.1 million loss in the first quarter of 2017 due to the increase in the contingent purchase price liability related to NeuVax compared to a $0.2 million loss during the same period in 2016.

Loss from discontinued operations from Galena’s former commercial business for the first quarter of 2017 was $9.4 million, or $0.36 per basic and diluted share, compared to $3.4 million, or $0.38 per basic and diluted share, for the same period of 2016. Loss from discontinued operations during the first quarter of 2017 includes accrual for a one-time $7.5 million civil payment settlement, which is accrued as of March 31, 2017 in current liabilities of discontinued operations, related to the oral agreement in principle with the USAO NJ and the DOJ. The final terms and details of this settlement are subject to change pending the completion and execution of a definitive settlement agreement among the Company and the USAO NJ and DOJ. The agreement is anticipated to be a global settlement encompassing any potential claims that might be made by state and federal agencies. There is no assurance that the Company will be able to complete a definitive settlement agreement on the final terms of the oral agreement in principle including its financial impact or any future adjustment to the financial statements.

Overall, net loss for the first quarter of 2017 was $11.7 million, or $0.45 per basic and diluted share, compared to net loss of $16.5 million, or $1.84 per basic and diluted share, for the same period of 2016.

Cash and Cash Equivalents

Galena had cash and cash equivalents of approximately $27.6 million as of March 31, 2017, compared with $18.1 million as of December 31, 2016. The increase of approximately $9.6 million in cash and cash equivalents from December 31, 2016 to March 31, 2017 was attributable primarily to $15.5 million in net proceeds from the issuance of common stock and warrants to purchase common stock from the Company’s equity financing completed in February 2017, and $4.5 million in redemptions of the debenture paid by the Company in shares of common stock which facilitated the release of restricted cash in the same amount. The increase was partially offset by $10.4 million used in operating activities. As of March 31, 2017, Galena had $13.2 million of restricted cash under the terms of the debenture.

2

FIRST QUARTER AND RECENT HIGHLIGHTS

Operational Highlights

Positive Interim Safety Data on the NeuVax (nelipepimut-S) Clinical Trial in Combination with Trastuzumab in High-Risk HER2 3+ Patients
A poster was presented on the NeuVax investigator-sponsored Phase 2 clinical trial in high-risk, HER2 3+ patients at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2017 in Washington, DC. The Phase 2 is a multi-center, prospective, randomized, single-blinded, placebo-controlled trial combining NeuVax and trastuzumab in the adjuvant setting to prevent recurrence in HER2-positive (HER2 3+) breast cancer patients. The poster, entitled, "Pre-specified interim analysis in a prospective, randomized phase II trial of trastuzumab vs trastuzumab + NeuVax to prevent breast cancer recurrence in HER2+ breast cancer patients," presented the interim safety analysis that was initiated after enrollment of the 50th patient in the trial (vaccine group (VG) n=22, control group (CG) n=28). The analysis demonstrated that the agent is well tolerated with no increased cardiotoxicity associated with giving NeuVax in combination with trastuzumab.

Positive Final GALE-301 (E39) Phase 1/2a Clinical Trial Data
An oral presentation entitled, "Analysis of a Phase I/IIa Trial Assessing E39+GM-CSF, a Folate Binding Protein Vaccine, to Prevent Recurrence in Ovarian and Endometrial Cancer Patients" was given in March 2017 by Dr. Larry Maxwell at the Annual Meeting on Women’s Cancer 2017 hosted by the Society of Gynecologic Oncology. GALE-301 is a cancer immunotherapy consisting of a peptide derived from Folate Binding Protein (FBP) combined with the immune adjuvant, granulocyte macrophage-colony stimulating factor (GM-CSF) for the prevention of cancer recurrence in ovarian and endometrial cancer patients in the adjuvant setting. This final data from the early stage clinical trial demonstrated that GALE-301 is well tolerated and a statistically significant disease free survival was obtained in a small number of patients treated with the optimal dose.

Positive Outcome from the Data Safety Monitoring Board on the Two NeuVax Clinical Trials in Combination with Trastuzumab
In February 2017, Galena reported the results from a meeting of the DSMB for the two investigator-sponsored combination clinical trials with NeuVax plus trastuzumab. The DSMB reported that there are no safety concerns with either trial and neither was found to be futile. For the Phase 2b trial in patients with low-to-intermediate HER2 expression (HER2 1+/2+), n=242 patients were evaluated, and the recommendation from the DSMB is to continue the trial with one revision to the statistical analysis plan regarding the timing of the pre-specified interim analysis. Given the lengthy duration of enrollment for the trial, the DSMB determined that the pre-specified interim efficacy analysis be moved up from 12 months to 6 months after the last patient is enrolled. Completion of enrollment is expected in the second quarter of 2017; therefore, the DSMB expects to perform the interim efficacy analysis near the end of 2017. For the Phase 2 trial in high-risk, HER2 3+ patients, and per the trial protocol, the pre-specified interim safety analysis was also completed on n=50 patients and demonstrated that NeuVax is well tolerated with no increased cardiotoxicity associated with giving NeuVax in combination with trastuzumab. The recommendation from the DSMB is to continue the HER2 3+ trial unmodified.

3

Corporate Highlights

Settlement with the Securities and Exchange Commission
In December 2016, Galena and its former CEO, Mark Ahn, reached an agreement in principle to a proposed settlement that would resolve an investigation by the staff of the Securities and Exchange Commission (SEC) involving conduct in the period 2012-2014 regarding the commissioning of internet publications by outside promotional firms. On April 10, 2017, the SEC made an announcement that marks a formal conclusion to the SEC investigation for the Company.

Evaluation of Strategic Alternatives and Resignation of President and Chief Executive Officer
On January 31, 2017, Galena’s Board of Directors announced that it is in the process of engaging an outside advisor to evaluate strategic alternatives for the company focused on maximizing stockholder value. On March 9, 2017, it was announced that Canaccord Genuity, Inc. was engaged as the Company’s financial advisor to assist in the review process. Potential strategic alternatives that may be explored or evaluated as part of this review include continuing to advance the clinical programs as a stand-alone entity, a sale of the company, a business combination, a merger or reverse merger, and a license or other disposition of corporate assets of the company. There is no set timetable for this process and there can be no assurance that this process will result in a transaction. On January 31, 2017, the Company also announced the resignation of Mark W. Schwartz, Ph.D. as President and Chief Executive Officer and as a member of the board of directors of each of Galena Biopharma, Inc., Apthera, Inc. and Mills Pharmaceutical, LLC.

Appointed Interim Chief Executive Officer
Stephen F. Ghiglieri was appointed by the Board of Directors as Interim Chief Executive Officer, effective February 21, 2017. Mr. Ghiglieri will also continue to serve as the Company’s Chief Financial Officer, a position to which he was appointed in November 2016.

Closed a Public Offering of Common Stock and Warrants
On February 12, 2017, the Company closed the previously announced underwritten public offering of common stock and warrants. The net proceeds to Galena were approximately $15.5 million.

4

GALENA BIOPHARMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(Amounts in thousands, except share and per share data)

Quarter Ended March 31,

2017

2016
Operating expenses:

Research and development
$
2,362

$
5,443

General and administrative
2,726

3,525

Total operating expenses
5,088

8,968

Operating loss
(5,088
)

(8,968
)
Non-operating income (expense):

Change in fair value of warrants potentially settleable in cash
3,892

(3,873
)
Interest expense, net
(973
)

(91
)
Change in fair value of the contingent purchase price liability
(113
)

(170
)
Total non-operating income (expense), net
2,806

(4,134
)
Loss from continuing operations
$
(2,282
)

$
(13,102
)
Discontinued operations

Loss from discontinued operations
(9,436
)

(3,391
)
Net loss
$
(11,718
)

$
(16,493
)
Net loss per common share:

Basic and diluted net loss per share, continuing operations
$
(0.09
)

$
(1.46
)
Basic and diluted net loss per share, discontinued operations
$
(0.36
)

$
(0.38
)
Basic and diluted net loss per share
$
(0.45
)

$
(1.84
)
Weighted-average common shares outstanding: basic and diluted
26,406,356

8,968,616

5

GALENA BIOPHARMA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(Amounts in thousands)

March 31, 2017

December 31, 2016
ASSETS

Current assets:

Cash and cash equivalents
$
27,640

$
18,083

Restricted cash
13,590

18,022

Prepaid expenses and other current assets
449

581

Current assets of discontinued operations
367

813

Total current assets
42,046

37,499

Equipment and furnishings, net
173

199

In-process research and development
12,864

12,864

GALE-401 rights
9,255

9,255

Goodwill
5,898

5,898

Deposits
96

96

Total assets
$
70,332

$
65,811

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable
$
1,163

$
840

Accrued expense and other current liabilities
3,189

4,292

Litigation settlement payable
950

950

Fair value of warrants potentially settleable in cash
8,325

1,860

Current portion of long-term debt
12,597

16,397

Current liabilities of discontinued operations
10,045

6,059

Total current liabilities
36,269

30,398

Deferred tax liability, non-current
5,661

5,661

Contingent purchase price consideration, net of current portion
1,208

1,095

Total liabilities
43,138

37,154

Stockholders’ equity
27,194

28,657

Total liabilities and stockholders’ equity
$
70,332

$
65,811

Mannkind has filed a 10-Q – Quarterly report [Sections 13 or 15(d)] with the U.S. Securities and Exchange Commission (Filing, 10-Q, Mannkind, 2017, MAY 10, 2017, View Source [SID1234521709]).

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On May 10, 2017 Merck (NYSE: MRK), known as MSD outside the United States and Canada, reported that the U.S. Food and Drug Administration (FDA) has approved KEYTRUDA (pembrolizumab), the company’s anti-PD-1 therapy, in combination with pemetrexed (brand name Alimta) and carboplatin (pem/carbo), a commonly used chemotherapy regimen, for the first-line treatment of metastatic nonsquamous NSCLC, irrespective of PD-L1 expression (Press release, Merck & Co, MAY 10, 2017, View Source [SID1234519005]). Under the FDA’s accelerated approval regulations, this indication is approved based on tumor response rate and progression-free survival (PFS). Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials.

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The approval was based on data from KEYNOTE-021, Cohort G1, in 123 previously untreated patients with metastatic nonsquamous NSCLC with no EGFR or ALK genomic tumor aberrations and irrespective of PD-L1 expression. In this trial, KEYTRUDA + pem/carbo demonstrated an objective response rate (ORR) that was nearly double the ORR of pem/carbo alone (55 percent [95% CI: 42, 68] compared to 29 percent [95% CI: 18, 41], respectively; all responses were partial responses). Among patients who received KEYTRUDA + pem/carbo, 93 percent had a duration of response of six months or more (range 1.4+ to 13.0+ months) compared to 81 percent who received pem/carbo alone (range 1.4+ to 15.2+ months). In addition, findings demonstrated an improvement in PFS (HR 0.53 [95% CI, 0.31-0.91; p=0.0205]), with a median PFS of 13.0 months (95% CI, 8.3-not estimable) for patients treated with KEYTRUDA + pem/carbo compared to 8.9 months (95% CI, 4.4-10.3) with pem/carbo alone.

Immune-mediated adverse reactions occurred with KEYTRUDA including pneumonitis, colitis, hepatitis, endocrinopathies, and nephritis. Based on the severity of the adverse reaction, KEYTRUDA should be withheld or discontinued and corticosteroids administered when appropriate. KEYTRUDA can also cause severe or life-threatening infusion-related reactions. Monitor patients for signs and symptoms of infusion-related reactions; for Grade 3 or 4 reactions, stop infusion and permanently discontinue KEYTRUDA (pembrolizumab). Based on its mechanism of action, KEYTRUDA can cause fetal harm when administered to a pregnant woman. Female patients of reproductive potential should be advised of the potential hazard to a fetus. For more information regarding immune-mediated and infusion-related adverse reactions and use in pregnancy, see "Selected Important Safety Information" below.

"The improved responses seen with the KEYTRUDA plus pemetrexed/carboplatin regimen are significant, and highlight the importance of finding new approaches that address the unmet needs of patients with metastatic nonsquamous non-small cell lung cancer," said Dr. Roger M. Perlmutter, president, Merck Research Laboratories. "Today’s approval further supports our commitment to improve the lives of people with cancer."

"This approval marks an important milestone in the treatment of lung cancer. Now, pembrolizumab in combination with pemetrexed and carboplatin can be prescribed in the first-line setting for patients with metastatic nonsquamous non-small cell lung cancer, irrespective of PD-L1 expression," said Dr. Corey Langer, director of thoracic oncology and professor of medicine at the Hospital of the University of Pennsylvania. "Physicians should continue to use each patient’s individual characteristics – including biomarker status, histology, and other clinical factors – to determine the best treatment plan for each person."

The combination therapy indication makes KEYTRUDA an option for more patients. KEYTRUDA is the only anti-PD-1 approved in the first-line setting as both monotherapy and combination therapy for appropriate patients with metastatic NSCLC. KEYTRUDA is approved as monotherapy in the first-line setting for patients with metastatic 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 monotherapy is also indicated for the second-line or greater 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.

"The combination of this immunotherapy with pemetrexed and carboplatin is more good news for patients," said Bonnie J. Addario, a lung cancer survivor and founder of the Bonnie J. Addario Lung Cancer Foundation. "Congratulations to Merck and the FDA for moving so swiftly on this important addition to our patients’ options for treatment. With this approval, hope for lung cancer patients continues to improve."

Data Supporting the Approval

The efficacy of KEYTRUDA (pembrolizumab) was investigated in patients enrolled in the open-label, multicenter, multi-cohort KEYNOTE-021 study; the efficacy data are limited to patients with metastatic nonsquamous NSCLC randomized within the single cohort (Cohort G1). The KEYNOTE-021G1 trial was conducted in collaboration with Eli Lilly and Company, the maker of pemetrexed. The key eligibility criteria for this cohort were locally advanced or metastatic nonsquamous NSCLC, regardless of tumor PD-L1 expression status, and no prior systemic treatment for metastatic disease. Patients with autoimmune disease that required systemic therapy within two years of treatment; a medical condition that required immunosuppression; or who had received more than 30 Gy of thoracic radiation within the prior 26 weeks were ineligible. Patients in KEYNOTE-021G1 were randomized to receive KEYTRUDA + pem/carbo (n=60) or pem/carbo alone (n=63). Patients in the KEYTRUDA combination arm received KEYTRUDA (200 mg), pemetrexed (500 mg/m2), and carboplatin (AUC 5 mg/mL/min) every three weeks for four cycles followed by KEYTRUDA every three weeks. In the control arm, patients received pemetrexed (500 mg/m2) and carboplatin (AUC 5 mg/mL/min) alone for four cycles. At the investigator’s discretion, maintenance pemetrexed (500 mg/m2) every three weeks was permitted in both treatment arms. Treatment with KEYTRUDA continued until Response Evaluation Criteria in Solid Tumors (RECIST) 1.1-defined progression of disease as determined by blinded independent central review (BICR), unacceptable toxicity, or a maximum of 24 months. Administration of KEYTRUDA was permitted beyond RECIST-defined disease progression if the patient was clinically stable and deriving clinical benefit as determined by the investigator.

The major efficacy outcome measure was ORR as assessed by BICR using RECIST 1.1. Additional efficacy outcome measures were PFS as assessed by BICR using RECIST 1.1, duration of response, and overall survival (OS).

Findings from this cohort demonstrated an ORR with KEYTRUDA + pem/carbo of 55 percent (95% CI: 42, 68) compared to 29 percent (95% CI: 18, 41) for pem/carbo alone. KEYTRUDA in this combination also reduced the risk of disease progression or death by 47 percent (HR, 0.53 [95% CI, 0.31, 0.91]; p=0.0205).

Exploratory analyses found similar results in patients with or without PD-L1 expression, with an ORR in patients whose tumors did not express PD-L1 (TPS <1%) of 57 percent with KEYTRUDA + pem/carbo compared to 13.0 percent with pem/carbo alone; in patients with PD-L1 TPS ≥1%, the ORR was 54 percent with KEYTRUDA + pem/carbo compared to 38 percent with pem/carbo alone.

Efficacy Results from KEYNOTE-021, Cohort G1

Endpoint
KEYTRUDA + Pem/Carbo
(n=60)

Pem/Carbo
(n=63)
Overall Response Rate
Overall Response Rate 55% 29%
(95% CI) (42, 68) (18, 41)
Complete Response 0% 0%
Partial Response 55% 29%
p-value* 0.0032
Duration of Response
% with duration ≥6-months† 93% 81%
Range (months) 1.4+ to 13.0+ 1.4+ to 15.2+
PFS
Number of events (%) 23 (38%) 33 (52%)
Progressive Disease 15 (25%) 27 (43%)
Death 8 (13%) 6 (10%)
Median in months (95% CI) 13.0 (8.3, NE) 8.9 (4.4, 10.3)
Hazard ratio‡ (95% CI) 0.53 (0.31, 0.91)
p-value§ 0.0205
* Based on Miettinen-Nurminen method stratified by PD-L1 status (TPS < 1% vs. TPS ≥ 1%)
† Based on Kaplan-Meier estimation
‡ Based on the Cox proportional hazard model stratified by PD-L1 status (TPS < 1% vs. TPS ≥ 1%)
§ Based on the log-rank test stratified by PD-L1 status (TPS < 1% vs. TPS ≥ 1%)
NE = not estimable

In the KEYNOTE-021G1 trial, safety was evaluated in 59 patients who received KEYTRUDA (pembrolizumab) + pem/carbo and 62 patients who received pem/carbo alone. KEYNOTE-021 was not designed to demonstrate a statistically significant difference in adverse reaction rates for KEYTRUDA plus chemotherapy, as compared to chemotherapy alone, for any specified adverse reaction listed in the chart below.

KEYTRUDA was discontinued for adverse reactions in 10 percent of 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%).

Adverse Reactions Occurring in ≥20% of Patients in KEYNOTE-021, Cohort G1

KEYTRUDA + Pem/Carbo
n=59

Pem/Carbo
n=62
Adverse Reaction
All Grades*
(%)

Grade 3-4
(%)

All Grades
(%)

Grade 3-4
(%)
General Disorders and Administration Site Conditions
Fatigue 71 3.4 50 0
Peripheral Edema 22 0 18 0
Gastrointestinal Disorders
Nausea 68 1.7 56 0
Constipation 51 0 37 1.6
Vomiting 39 1.7 27 0
Diarrhea 37 1.7 23 1.6
Skin and Subcutaneous Tissue Disorders
Rash† 42 1.7 21 1.6
Pruritus 24 0 4.8 0
Alopecia 20 0 3.2 0
Respiratory, Thoracic and Mediastinal Disorders
Dyspnea 39 3.4 21 0
Cough 24 0 18 0
Metabolism and Nutrition Disorders
Decreased Appetite 31 0 23 0
Nervous System Disorders
Headache 31 0 16 1.6
Dizziness 24 0 16 0
Dysgeusia 20 0 11 0
Psychiatric Disorders
Insomnia 24 0 15 0
Infections and Infestations
Upper respiratory tract infection 20 0 3.2 0
Musculoskeletal and Connective Tissue Disorders
Arthralgia 15 0 24 1.6
* Graded per NCI CTCAE v4.0
† Includes rash, rash generalized, rash macular, rash maculo-papular, and rash pruritic.

When administering KEYTRUDA in combination with pem/carbo, KEYTRUDA should be administered first prior to chemotherapy when given on the same day. In metastatic NSCLC, KEYTRUDA is approved at a fixed dose of 200 mg administered as an intravenous infusion over 30 minutes every three weeks until disease progression, unacceptable toxicity, or up to 24 months in patients without disease progression; pemetrexed and carboplatin should be administered according to their FDA-approved labels.

About KEYTRUDA (pembrolizumab) Injection

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.

Studies of KEYTRUDA – from the largest immuno-oncology program in the industry with more than 450 trials – include a wide variety of cancers and treatment settings. The KEYTRUDA clinical program seeks to understand factors that predict a patient’s likelihood of benefitting from treatment with KEYTRUDA, including the exploration of several different biomarkers across a broad range of tumors.

KEYTRUDA (pembrolizumab) Indications and Dosing

Melanoma

KEYTRUDA is indicated for the treatment of patients with unresectable or metastatic melanoma at a dose of 2 mg/kg 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 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 (pembrolizumab) 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.

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 (pembrolizumab) 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. 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 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.

KEYTRUDA can cause other clinically important immune-mediated adverse reactions. 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%), exfoliative dermatitis, bullous pemphigoid, rash (1.4%), 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 postmarketing 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 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, 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.

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%).

When KEYTRUDA (pembrolizumab) was administered in combination with pemetrexed and carboplatin, 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%). The study was not designed to demonstrate a statistically significant difference in adverse reaction rates for KEYTRUDA plus chemotherapy, as compared to chemotherapy alone, for any specified adverse reaction.

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.

On May 10, 2017 Intrexon Corporation (NYSE: XON), a leader in the engineering and industrialization of biology to improve the quality of life and health of the planet, reported its first quarter financial results for 2017 (Press release, Intrexon, MAY 10, 2017, View Source [SID1234519041]).

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Business Highlights and Recent Developments:

Intrexon’s proprietary methanotroph bioconversion platform has achieved yields necessary for site selection on two molecules, isbobutyraldehyde and 2,3 butanediol (2,3 BDO), each of which represent a multi-billion dollar revenue opportunity for the Company. Yields for 2,3 BDO, a precursor to butadiene, increased by greater than 30% during the first quarter of 2017. This yield level produces a positive "in the money" gross margin based on current natural gas and product prices. While additional yield improvements and scaling milestones must be met, the current yields and business implications have led the Company to retain Moelis & Company to advise it on strategic and financial options with respect to its bioconversion platform and specific products;
Announced formation of Precigen, Inc., a wholly owned subsidiary of the Company, to accelerate strategic evaluation of structural alternatives for consolidation of Intrexon’s health-related assets to enhance shareholder value and maximize the potential of the Company’s programs in health;
Provided update on development of next-generation chimeric antigen receptor T cell (CAR-T) therapy for cancer in strategic collaboration with ZIOPHARM Oncology, Inc. (NASDAQ: ZIOP) and biopharmaceutical division of Merck KGaA, Darmstadt, Germany, announcing the approach for the previously chosen two targets will focus on use of the proprietary RheoSwitch Therapeutic System (RTS) platform to regulate expression of membrane-bound interleukin-15 (mbIL15) co-expressed with CARs and Sleeping Beauty non-viral gene integration;
Entered into a definitive agreement to acquire GenVec, Inc. (NASDAQ: GNVC) and announced plans to develop a next generation adenoviral (AdV) platform with significantly higher payload capacity compared to current systems by combining GenVec’s expertise in AdV vectors and cGMP drug product manufacturing with Intrexon’s proficiency in viral and non-viral gene transfer;
Signed a Cooperative Research and Development Agreement (CRADA) with the National Cancer Institute (NCI) in collaboration with ZIOPHARM for the development of adoptive cell transfer-based immunotherapies using autologous peripheral blood lymphocytes genetically modified using the Sleeping Beauty system to express T-cell receptors for the treatment of solid tumors in patients with advanced cancers;
Collaborator ZIOPHARM announced U.S. Food and Drug Administration (FDA) acceptance of investigator-initiated Investigational New Drug (IND) application for a Phase 1 trial infusing the Company’s CD33-specific CAR+ T therapy, which incorporates a kill switch, for relapsed or refractory acute myeloid leukemia (AML), with the first patient to be enrolled in the study expected to begin treatment in the third quarter of 2017;
Collaborator ZIOPHARM reported successful end-of-phase 2 meeting with the FDA for Ad-RTS-hIL-12 + veledimex in recurrent glioblastoma and is assessing protocol design options for a pivotal Phase 3 trial in conjunction with its investigators and regulators;
Collaborator ZIOPHARM announced improved production times in its ongoing Phase I trial of 2nd generation Sleeping Beauty CD19+ CAR-T cells and progress toward its "Point-of-Care" approach. One patient with multiple-relapsed acute lymphoblastic leukemia achieved a complete response and a patient with triple-hit non-Hodgkin lymphoma was treated with T cells manufactured in 2 weeks;
Collaborator Fibrocell Science, Inc. (NASDAQ: FCSC) received fast track designation from the FDA for FCX-007 for treatment of recessive dystrophic epidermolysis bullosa (RDEB) and announced dosing of first patient in Phase I portion of Phase I/II clinical trial of FCX-007 gene therapy;
Exemplar Genetics, a wholly-owned subsidiary of Intrexon, was awarded a subcontract to create genetically engineered miniswine models of sickle cell disease as part of a national resource that could lead to new treatments for the disorder;
Oxitec, a wholly owned subsidiary of Intrexon, and the Municipality of Santiago de Cali, Colombia announced a memorandum of understanding to deploy Friendly Aedes in the Comuna 16 region, an area of over 104,000 residents, to control populations of the Aedes aegypti mosquito, the primary vector for dengue, chikungunya, Zika, and yellow fever;
In collaboration with Gangabishan Bhikulal Investment and Trading Limited, Oxitec initiated outdoor caged trials in India to demonstrate the efficacy of Oxitec’s Friendly mosquitoes;
Oxitec reported its Friendly Aedes achieved greater than 80% suppression of wild Aedes aegypti in CECAP/Eldorado in Piracicaba, Brazil, in the second year of the project, as well as 78% reduction in the São Judas neighborhood of Piracicaba only six months after initial releases;
AquaBounty Technologies, Inc. (NASDAQ: AQB; AIM: ABTU), majority-owned subsidiary of Intrexon, completed the listing of its common shares on the NASDAQ Stock Market and finalized an equity subscription from Intrexon. In conjunction with the listing, Intrexon distributed a special stock dividend of shares of AquaBounty common stock it owned to its shareholders while maintaining majority ownership of AquaBounty’s outstanding common stock;
Announced appointment of Andy Bass as Senior Vice President, Consumer Sector, which will henceforth do business as BioPop, to lead the design and commercialization of new biologically-based products and applications across the consumer market; and
Appointed leading pharma executive Vinita Gupta to Intrexon’s Board of Directors.
First Quarter Financial Highlights:

Total revenues of $53.7 million, an increase of 24% over the first quarter of 2016;
Net loss of $31.4 million attributable to Intrexon, or $(0.26) per basic share, including non-cash charges of $24.7 million;
Adjusted EBITDA of $(7.1) million, or $(0.06) per basic share;
The net change in deferred revenue related to upfront and milestone payments, which represents the cash and stock received from collaborators less the amount of revenue recognized during the period, was a decrease of $10.2 million compared to a net increase of $13.5 million in the first quarter of 2016;
Cash consideration received for reimbursement of research and development services covered 54% of cash operating expenses (exclusive of operating expenses of consolidated subsidiaries);
Total consideration received for technology access fees, reimbursement of research and development services and products and services revenues covered 64% of consolidated cash operating expenses; and
Cash, cash equivalents, and short-term investments totaled $205.2 million, the value of investments in preferred stock totaled $134.7 million, and the value of equity securities totaled $21.5 million at March 31, 2017.
"Considering the company’s progress in the first quarter and year to date," commented Randal J. Kirk, Chairman and Chief Executive Officer of Intrexon, "I am gratified by the vision that underlies this company, by the business plan that has made it possible to do so much relative to such a modest expenditure of our shareholder’s cash, by the confidence of our shareholders, our board and our team in that plan’s ultimate feasibility and by the patience of all while our brilliant team would mature the company’s technical assets and human capital into realizations that will make a great difference in the world."

Mr. Kirk concluded, "We believe that we quite clearly have before us a number of significant realizations – in health, in energy, in food, in environment and in consumer industries – and we are fully engaged upon them."

First Quarter 2017 Financial Results Compared to Prior Year Period

Total revenues increased $10.3 million, or 24%, over the quarter ended March 31, 2016. Collaboration and licensing revenues increased $9.0 million from the quarter ended March 31, 2016 due to (i) the recognition of deferred revenue for upfront payments received from collaborations signed by the Company between April 1, 2016 and March 31, 2017 and the recognition of the payment received in June 2016 from ZIOPHARM to amend the collaborations between us; and (ii) increased research and development services for these collaborations and for the progression of programs or the addition of new programs with previously existing collaborators. Product revenues decreased $0.4 million, or 5% primarily due to a decrease in the quantities of pregnant cows sold due to lower customer demand for these products. Gross margin on products was consistent period over period. Service revenues increased $1.4 million, or 13%, due to an increase in the number of bovine in vitro fertilization cycles performed due to higher customer demand. Gross margin on services decreased slightly in the current period primarily due to an increase in royalties and commissions due to vendors.

Research and development expenses increased $8.3 million, or 32%, due primarily to increases in (i) salaries, benefits and other personnel costs for research and development employees, (ii) lab supplies and consulting expenses, and (iii) depreciation and amortization. Salaries, benefits and other personnel costs increased $2.6 million due to an increase in research and development headcount to support new and expanded collaborations. Lab supplies and consulting expenses increased $3.4 million as a result of (i) the progression of certain programs into the preclinical and clinical phases with certain of Intrexon’s collaborators, and (ii) the increased level of research and development services provided to Intrexon’s collaborators. Depreciation and amortization increased $1.3 million primarily as a result of amortization of developed technology acquired from Oxitec Limited which began in November 2016 upon the completion of certain operational and regulatory events. Selling, general and administrative (SG&A) expenses decreased $7.7 million, or 18%. Salaries, benefits and other personnel costs decreased $4.9 million primarily due to the reversal of previously recognized stock-based compensation expense for stock options granted to a former employee. In 2016, the Company recorded $4.2 million in litigation expenses arising from the entrance of a court order in the Company’s trial with XY, LLC. These SG&A decreases were offset by an increase of $2.1 million of legal and professional fees due to (i) expenses incurred to support domestic and international government affairs for regulatory and other approvals necessary to commercialize the Company’s products and services; and (ii) increased legal fees to defend ongoing litigation.

Total other income (expense), net, increased $24.8 million, or 116%, from the quarter ended March 31, 2016. This increase was primarily attributable to (i) a decline in unrealized depreciation in the Company’s equity securities portfolio of $20.3 million, and (ii) dividend income of $3.9 million from the Company’s investments in preferred stock.

Titan Pharmaceuticals has filed a 10-Q – Quarterly report [Sections 13 or 15(d)] with the U.S. Securities and Exchange Commission .

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