On November 3, 2016 Curis, Inc. (NASDAQ:CRIS), a biotechnology company focused on the development and commercialization of innovative and effective drug candidates for the treatment of human cancers, reported its financial results for the third quarter ended September 30, 2016 (Press release, Curis, NOV 3, 2016, View Source [SID1234516211]).

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"We are pleased with our progress this quarter, and remain focused on patient enrollment within our two clinical programs. CA-170’s Phase 1 trial is progressing rapidly through the dose escalation stage with no limiting adverse safety effects," said Ali Fattaey, Ph.D., Curis’s CEO. "Additionally, we continue to enroll at multiple centers in the Phase 2 trial of CUDC-907 in patients with relapsed/refractory DLBCL. Our goal is to assess CUDC-907’s efficacy in patients with MYC-altered DLBCL and we expect to use this information for discussion with the FDA in 2017."

Dr. Fattaey continued, "Our collaboration with Aurigene continues to progress well. In September, we completed a $24.5M financing with Aurigene. In October, we licensed a second immuno-oncology program, designating CA-327 as an oral small molecule development candidate targeting PDL1 and TIM3. We expect to file an IND for CA-327 in 2017."

Third Quarter 2016 Financial Results

Curis reported a net loss of $28.3 million, or $(0.21) per share on both a basic and diluted basis for the third quarter of 2016, as compared to a net loss of $5.5 million, or $(0.04) per share on both a basic and diluted basis for the same period in 2015. Curis reported a net loss of $49.1 million or $(0.38) per share on both basic and diluted basis for the nine months ended September 30, 2016, as compared to a net loss of $45.5 million, or $(0.37) per share on both basic and diluted basis for the same period in 2015. The net loss for the three and nine months ended September 30, 2016 includes a non-cash in-process research and development charge of $18.0 million related to the amendment of Curis’s license agreement with Aurigene. The net loss for the nine months ended September 30, 2015 includes a non-cash in-process research and development charge of $24.3 million related to Curis’s license agreement with Aurigene.

Revenues for the third quarter of 2016 were $1.8 million, as compared to $2.0 million for the same period in 2015. Revenues for both periods comprise primarily royalty revenues recorded on Genentech and Roche’s net sales of Erivedge. Revenues for the nine months ended September 30, 2016 were $5.2 million, as compared to $5.8 million for the same period in 2015.

Operating expenses were $29.5 million for the third quarter of 2016, as compared to $6.9 million for the same period in 2015.

Operating expenses for the nine months ended September 30, 2016 were $52.4 million, as compared to $49.0 million for the same period in 2015, and comprised the following:

Costs of Royalty Revenues. Costs of royalty revenues, primarily amounts due to third-party university patent licensors in connection with Genentech and Roche’s Erivedge net sales, were $0.1 million for both the third quarter of 2016 and 2015. Cost of royalty revenues for the nine months ended September 30, 2016 and 2015 were $0.3 million for both periods.

In-Process Research and Development Expense. In-process research and development expense was $18.0 million for the third quarter of 2016, as compared to $24.3 million for the same period in 2015. These charges are associated with the stock issuances of 10,208,333 and 17,120,131 shares of Curis common stock to Aurigene, respectively. These shares were issued as consideration for the rights granted under the terms of the September 2016 amendment to the collaboration agreement and partial consideration for the rights granted under the terms of the January 2015 collaboration agreement, respectively.

Research and Development Expenses. Research and development expenses were $6.8 million for the third quarter of 2016, as compared to $4.0 million for the same period in 2015. The increase was primarily due to increased direct spending related to clinical activities of CUDC-907 and programs under the Aurigene collaboration over the prior year period. Employee-related expenses increased over the prior year period primarily due to additional headcount to support the multiple programs. Research and development expenses were $22.4 million for the nine months ended September 30, 2016 as compared to $14.7 million for the same period in 2015.

General and Administrative Expenses. General and administrative expenses were $4.7 million for the third quarter of 2016 as compared to $2.8 million for the same period in 2015. The increase in general and administrative expenses was driven primarily by higher personnel costs and stock-based compensation expense due to increased headcount and an increase in legal service costs. General and administrative expenses were $11.7 million for the nine months ended September 30, 2016, as compared to $9.7 million for the same period in prior 2015.

Other expense, net was $0.6 million for the third quarter of 2016, as compared to $0.7 million for the same period in 2015. Other expense, net primarily consisted of interest expense related to the loan made by BioPharma-II (an investment fund managed by Pharmakon Advisors) to Curis Royalty (a wholly owned subsidiary of Curis). Other expense, net was $1.8 million and $2.3 million for the nine months ended September 30, 2016 and 2015, respectively.

As of September 30, 2016, Curis’s cash, cash equivalents, marketable securities and investments totaled $53.4 million and there were approximately 140.0 million shares of common stock outstanding.

Recent Operational Highlights

Curis – Aurigene collaboration:

In October, 2016 Curis licensed the second oral small molecule immuno-oncology development candidate under the collaboration. This program is focused on the development of oral, small molecule antagonists that target two distinct checkpoint pathways: the programmed death-1 (PD1) and T-cell immunoglobulin and mucin domain containing protein-3 (TIM3) pathways. Curis has designated CA-327 that targets programmed death ligand-1 (PDL1) and TIM3 as the development candidate.

In September, 2016 Curis’s collaboration Aurigene Discovery Technologies Ltd. invested in Curis at a premium by acquiring 10.2 million shares of Curis’s common stock in lieu of receiving up to $24.5 million of milestone and other payments from Curis that may become due under the companies’ 2015 collaboration agreement.
Upcoming Activities

Curis expects that it will make presentations at the following conferences through December 2016:

Presentation of preclinical results from CA-170 and CA-327 at the SITC (Free SITC Whitepaper) conference
Presentation of preclinical results from combination of CUDC-907 with other treatments at the ASH (Free ASH Whitepaper) annual conference

On November 3, 2016 Stemline Therapeutics, Inc. (Nasdaq:STML) reported that SL-401, a novel targeted therapeutic directed to CD123, will be featured in 7 presentations, including 3 oral presentations, at the 2016 American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition, to be held December 3-6, 2016 at the San Diego Convention Center in San Diego, CA (Press release, Stemline Therapeutics, NOV 3, 2016, View Source [SID1234516297]). The full abstracts are now available on the ASH (Free ASH Whitepaper) conference website.

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Investigators will deliver an oral presentation on updated clinical data from the SL-401 Phase 2 trial in blastic plasmacytoid dendritic cell neoplasm (BPDCN). Additional presentations include early clinical data from ongoing SL-401 trials in patients with acute myeloid leukemia (AML) in remission with high relapse risk and minimal residual disease (MRD), high-risk myeloproliferative neoplasms (MPN), and relapsed/refractory multiple myeloma. Preclinical data of SL-401 against AML, myelodysplastic syndrome (MDS), and myeloma cancer stem cells, as well as SL-401 in combination with SL-801, a novel XPO1 inhibitor, against myeloma and other malignancies will be presented as well.

Ivan Bergstein, M.D., Stemline’s CEO, commented, "We are honored to be presenting a broad range of SL-401 studies, including three oral presentations, at this year’s ASH (Free ASH Whitepaper) conference. SL-401 is rapidly becoming recognized by the community as not only an active anticancer agent, but also one with the potential versatility, due to its unique mechanism of action and manageable safety profile, to be utilized as single agent or in combination in a broad range of indications." Dr. Bergstein concluded, "Importantly, our clinical data in BPDCN continue to strengthen with increasing patient numbers and exposure, and we look forward to providing a robust and detailed update on this potentially pivotal program at the upcoming conference."

Details on the presentations are as follows:

SL-401 – BPDCN (Clinical) – Oral Presentation
Title: Results from Phase 2 Trial Ongoing Expansion Stage of SL-401 in Patients with Blastic Plasmacytoid Dendritic Cell Neoplasm (BPDCN)
Presenter: Naveen Pemmaraju, MD; MD Anderson Cancer Center
Abstract: 342
Session: 613. Acute Myeloid Leukemia: Clinical Studies: Optimizing Current AML Therapy
Date/Time: Sunday, December 4, 2016 10:45 AM PT
Location: Marriott Marquis San Diego Marina, Pacific Ballroom

SL-401 – AML in CR with MRD (Clinical) – Oral Presentation
Title: Results from Ongoing Phase 2 Trial of SL-401 As Consolidation Therapy in Patients with Acute Myeloid Leukemia (AML) in Remission with High Relapse Risk Including Minimal Residual Disease (MRD)
Presenter: Andrew Lane, MD, PhD; Dana-Farber Cancer Institute
Abstract: 215
Session: 613. Acute Myeloid Leukemia: Clinical Studies: Innovations in Induction Therapy
Date/Time: Saturday, December 3, 2016 5:00 PM PT
Location: Marriott Marquis San Diego Marina, San Diego Ballroom AB

SL-401 – Myeloproliferative neoplasms (Clinical)
Title: Results from Ongoing Phase 2 Trial of SL-401 in Patients with Advanced, High-Risk Myeloproliferative Neoplasms Including Chronic Myelomonocytic Leukemia
Presenter: Mrinal Patnaik, MBBS; Mayo Clinic
Abstract: 4245
Session: 634. Myeloproliferative Syndromes: Clinical: Poster III
Date/Time: Monday, December 5, 2016 6:00 PM – 8:00 PM PT
Location: San Diego Convention Center, Hall GH

SL-401 — Multiple myeloma (Clinical)
Title: Results from Ongoing Phase 1/2 Trial of SL-401 in Combination with Pomalidomide and Dexamethasone in Relapsed or Refractory Multiple Myeloma
Presenter: Myo Htut, MD; City of Hope
Abstract: 5696
Date/Time: Thursday, December 1, 2016 publication release
Location: Published online on ASH (Free ASH Whitepaper) abstract website

SL-401 – AML and MDS cancer stem cells – Oral Presentation
Title: SL-401 Mediates Potent Cytotoxicity Against CD123+ AML and MDS with Excess Blasts and Demonstrates Therapeutic Benefit in PDX Model
Presenter: Rajeswaran Mani, PhD; Ohio State University
Abstract: 580
Session: 604. Molecular Pharmacology and Drug Resistance in Myeloid Diseases: Targeting Leukemia-Initiating Cells
Date/Time: Monday, December 5, 2016?7:45 AM PT
Location: San Diego Convention Center, Room 24

SL-401 in combination with SL-801 — Multiple myeloma and other malignancies
Title: SL-401, a Targeted Therapy Directed to the Interleukin-3 Receptor (CD123), and SL-801, a Reversible Inhibitor of Exportin-1 (XPO1), Display Synergistic Anti-Tumor Activity Against Hematologic Malignancies in Vitro
Presenter: Janice Chen, PhD; Stemline
Abstract: 4724
Session: 802. Chemical Biology and Experimental Therapeutics: Poster III
Date/Time: Monday, December 5, 2016 6:00 PM – 8:00 PM PT
Location: San Diego Convention Center, Hall GH

SL-401 – Multiple myeloma
Title: SL-401, a Novel IL-3Rα/CD123—Directed Agent Targets Stem-like Cells in Multiple Myeloma
Presenter: Arghya Ray, PhD; Dana-Farber Cancer Institute
Abstract: 4463
Session: 652. Myeloma: Pathophysiology and Pre-Clinical Studies, excluding Therapy: Poster III
Date/Time: Monday, December 5, 2016 6:00 PM – 8:00 PM PT
Location: San Diego Convention Center, Hall GHa

On November 2, 2016 bluebird bio, Inc. (Nasdaq: BLUE), a clinical-stage company committed to developing potentially transformative gene therapies for severe genetic diseases and T cell-based immunotherapies for cancer, reported business highlights and financial results for the third quarter ended September 30, 2016 (Press release, bluebird bio, NOV 2, 2016, View Source;p=RssLanding&cat=news&id=2218784 [SID1234516184]).

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"In recent months, we have made important advances in our gene therapy transduction and manufacturing processes, translational research and clinical development that will be critical for us to successfully bring LentiGlobin drug product to patients with transfusion-dependent β-thalassemia (TDT) and severe sickle cell disease (SCD). This includes implementing a new LentiGlobin manufacturing process that has been shown in vitro to consistently improve the percentage of cells transduced and vector copy number, and making a number of changes to the protocol for our ongoing severe SCD study that we believe have the potential to improve patient outcomes. We look forward to sharing initial clinical data from these improvements in 2017," said Nick Leschly, chief bluebird. "In September we announced a strategic alliance with Medigene around TCRs against four targets, a significant step forward in our efforts to build a broad, fully integrated immuno-oncology franchise. We anticipate sharing further progress in oncology in the first half of 2017, with presentation of initial data from our Phase 1 study of bb2121, our anti-BCMA CAR T program in multiple myeloma."

Recent Highlights

PHASE 3 HGB-207 STUDY OF LENTIGLOBIN OPENED – In September, bluebird bio opened the company’s first Phase 3 study of LentiGlobin drug product. HGB-207 is a global, multi-center study in patients with TDT with non-β0/β0 genotypes. This study will incorporate the addition of bluebird bio’s transduction enhancers to the drug product manufacturing process, and will be conducted under the same Investigational New Drug application (IND) as previous studies of LentiGlobin drug product in TDT. This study, which will include adult and adolescent patients (cohort #1) and pediatric patients (cohort #2), is intended to be pivotal in the U.S. and confirmatory in the E.U. bluebird bio plans to initiate the HGB-212 pivotal study of LentiGlobin drug product in patients with TDT with β0/β0 genotypes in 2017.

GENE THERAPY DAY – In October, bluebird bio held a Gene Therapy Day to provide updates on its LentiGlobin product candidate and its research, development and commercialization strategies. Highlights included:
A head-to-head in vitro comparison of manufacturing Process 1 and Process 2 consistently improved the percentage of cells transduced and vector copy number (VCN) in cells from TDT patients of all genotypes and severe SCD patients.

bluebird bio has implemented several amendments to the protocol of the ongoing HGB-206 study in severe SCD, with the goal of improving patient outcomes by increasing successful engraftment of transduced cells.

bluebird bio has reached general agreement with the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA) on the regulatory paths forward for LentiGlobin in TDT in the U.S. and E.U.

STRATEGIC TCR ALLIANCE WITH MEDIGENE – In September, bluebird bio and Medigene announced that they have established a strategic alliance in cancer immunotherapy focused on four TCR targets. Under the terms of the agreement, Medigene will be responsible for the generation and delivery of TCRs using its TCR isolation and characterization platform. Following collaborative preclinical development, bluebird bio will assume sole responsibility for the clinical development and commercialization of the TCR product candidates and will receive an exclusive license for intellectual property covering the resulting TCRs.
LENTIGLOBIN ACCEPTED INTO EUROPEAN MEDICINES AGENCY (EMA) PRIME PROGRAM – In September, the EMA granted access to its Priority Medicines (PRIME) scheme for LentiGlobin drug product in the treatment of patients with TDT. The PRIME initiative provides enhanced support and increased interaction to companies, with the goal of optimizing development plans and speeding regulatory evaluations to potentially bring innovative medicines to patients more quickly. To be accepted for PRIME, a therapy must demonstrate potential to benefit patients with unmet medical need through early clinical data or nonclinical data.
Upcoming Anticipated Milestones

Presentation of updated TDT and SCD clinical data from the Northstar (HGB-204), HGB-205 and HGB-206 clinical studies at the American Society of Hematology (ASH) (Free ASH Whitepaper) annual meeting in December
Presentation of early data from CRB-401, the Phase 1 trial of bb2121 in relapsed/refractory multiple myeloma in the first half of 2017
Third Quarter 2016 Financial Results and Financial Guidance

Cash Position: Cash, cash equivalents and marketable securities as of September 30, 2016 were $727.6 million, compared to $865.8 million as of December 31, 2015, a decrease of $138.2 million.
Revenues: Collaboration revenue was $1.6 million for the third quarter of 2016 compared to $1.3 million for third quarter of 2015.
R&D Expenses: Research and development expenses were $64.0 million for the third quarter of 2016 compared to $30.4 million for the third quarter of 2015. The increase in research and development expenses was primarily attributable to increased in-licensing milestones and fees, increased manufacturing costs and increased information technology and facilities costs to support the advancement of our clinical and pre-clinical programs, and increased employee payroll costs to support our overall growth.
G&A Expenses: General and administrative expenses were $14.6 million for the third quarter of 2016 compared to $13.7 million for the third quarter of 2015. The increase in general and administrative expenses was primarily attributable to increased employee compensation expense due to increased headcount, partially offset by decreased stock-based compensation expense.
Net Loss: Net loss was $77.0 million for the third quarter of 2016 compared to $42.9 million for the third quarter of 2015.
Financial guidance: bluebird bio expects that its cash, cash equivalents and marketable securities of $727.6 million as of September 30, 2016 will be sufficient to fund its current operations through 2018.

November 2, 2016 Medivir AB (Nasdaq Stockholm: MVIR) reported that it has entered into an agreement to acquire two clinical stage oncology programs from Tetralogic Pharmaceuticals Corporation (Nasdaq: TLOG), advancing and expanding its clinical pipeline (Press release, Medivir, NOV 2, 2016, View Source [SID1234528400]). The acquisition includes remetinostat, a skin-directed HDAC inhibitor, and birinapant, a bivalent SMAC mimetic, and all intellectual property and data associated with Tetralogic’s HDAC inhibitor and SMAC mimetic projects.

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Remetinostat Clinical Program
Remetinostat is a topical, skin-directed inhibitor of histone deacetylases (HDACs) and has a strong link to Medivir´s existing expertise in protease inhibition. The compound was designed to effectively inhibit HDACs within cutaneous lesions, but to be rapidly broken down in the bloodstream, preventing the side effects associated with systemically administered HDAC inhibitors.

Remetinostat is currently in a late phase II program aimed to treat early stage cutaneous T-cell lymphoma (CTCL), a chronic, orphan hematologic cancer that presents in the skin. There are few drugs available for the treatment of the disease, and those currently available have generally poor tolerability. As a result, patients are in need of safe and effective new treatment options which remetinostat may represent. The estimated addressable market for early-stage CTCL in the US alone is approximately USD 900m annually.

Medivir currently plans to start a phase III trial with remetinostat in the second half of 2017.

Birinapant Clinical Program
Birinapant is a bivalent, second mitochondrial activator of caspases (SMAC) mimetic that binds cellular inhibitor of apoptosis proteins (cIAPs) and induces their degradation. cIAPs are part of the ubiquitin proteasome system, and birinapant therefore ties in well to Medivir’s existing interests in modulators of protein ubiquitination. Medivir currently plans to start two different clinical studies with birinapant:

A phase I study in combination with KeytrudaTM(pembrolizumab), a PD-1 inhibitor from Merck & Co., Inc. (MSD outside of the US and Canada, "MSD"), in patients with solid tumours, subject to transfer to Medivir of the clinical trial agreement between Tetralogic and MSD and receipt of KeytrudaTMsupply. Preclinical studies have shown that SMAC mimetics such as birinapant are able to enhance the response of T-cells to tumour antigens, and the objective of the planned phase I study is to investigate the safety of the combination and the potential of birinapant to enhance response rates seen with KeytrudaTMalone. PD-1 inhibitors such as KeytrudaTMare immuno-oncology products that have substantially improved treatment outcomes for patients with solid tumours. Revenues of PD-1 inhibitors as reported by MSD and Bristol-Myers Squibb in the last twelve months have totalled approximately USD 3.2b. The PD-1 inhibitor market is expected to continue to grow from increasing use and expansion of the number of indications for which they are approved.
A phase II program, to investigate birinapant in combination with platinum-based chemotherapy for the treatment for high-grade serous carcinomas (HGSCs), including ovarian cancer, in collaboration with clinical investigators at UCLA. The UCLA team have identified that platinum-resistant cells in HGSCs are highly susceptible to birinapant-platinum co-therapy in approximately half of patients, and have developed a bioassay to enable patient selection. High-grade serous carcinomas are tumours that are believed to be derived from cells in the fallopian tube and can present as ovarian, endometrial, tubal or peritoneal cancer. The majority of ovarian cancer cases are high-grade serous carcinomas and these patients have a very poor survival rate. The ovarian cancer market size overall is estimated to be USD 840m, with those patients resistant to platinum treatments representing the group with highest unmet need.
Financial Consideration and Third-Party Arrangements
The acquisition has been structured to provide an upfront cash payment, but with the majority of financial consideration tied to successful clinical development, regulatory approvals and sales milestones. Medivir will also assume agreements or certain obligations with other third parties, including the MSD agreement regarding KeytrudaTM, subject to confirmation from MSD.

The acquisition includes the following potential payments to Tetralogic and other third party licensees:

Upfront cash consideration of USD 12m;
Remetinostat development milestones through regulatory filings of up to USD 20m;
Remetinostat regulatory approval milestones of up to USD 45m;
Remetinostat tiered royalties capped at an aggregate of 13%;
Additional remetinostat commercialization milestones of up to USD 31m, primarily based on substantial sales achievement levels;
Birinapant development milestones and research support of up to USD 20m;
Birinapant tiered royalties capped at an aggregate of 10%; and
Additional birinapant commercialization milestones of up to USD 110m, primarily based on substantial sales achievement levels.
Strategic Overview
"This is a transformative transaction for Medivir and an important part of our strategy to expand our pipeline with programs in later stage clinical phases, shifting the balance from research to clinical development. The acquisition enables Medivir to build critical mass in development and secures visible value generation, with expected near-term and continuous news flow from multiple studies. These assets are complementary to our oncology efforts in early phases. Both programs have an excellent fit with the Medivir scientific platforms and we are uniquely positioned to recognize the value of both of Tetralogic’s clinical assets." says Niklas Prager, CEO & President of Medivir.

Richard Bethell, CSO of Medivir continues, "We are excited to have acquired these two projects, both of which have the potential to meaningfully advance the care of cancer patients. Medivir has a track record of discovering and developing drugs that are targeted to specific tissues, so we are well placed to rapidly progress remetinostat for the treatment of early-stage CTCL. Many patients with this disease are urgently in need of new treatments that are both safe and effective. We also believe that birinapant, through its effects on both immune and tumour cells, offers the potential to improve the treatment of a number of different cancers. We look forward to rapidly advancing both of these agents into the next round of clinical studies."

Closing Conditions
The transaction is subject to confirmation by MSD of agreement transfer to Medivir, the consent of the Tetralogic Senior Noteholders, approval of the Tetralogic shareholders and other customary closing conditions. Medivir expects the transaction to close by year end 2016.

On November 2, 2016 CombiMatrix Corporation (NASDAQ:CBMX), a family health molecular diagnostics company specializing in DNA-based reproductive health and pediatric testing services, reported financial results for the three and nine months ended September 30, 2016, and provided a business update (Press release, CombiMatrix, NOV 2, 2016, View Source [SID1234516186]).

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"Excellent execution on our business initiatives keeps us squarely on the path to profitability," said Mark McDonough, CombiMatrix President and CEO. "Among quarterly financial highlights, we are reporting revenue growth of 29%, our third consecutive quarter of gross margin above 50% and record cash reimbursement of $3.1 million, or 95% of total revenues. Combined with our ability to manage expenses, we reduced both our operating loss and our cash burn by nearly half from one year ago.

"We are pleased with our recent performance and expect continued growth in revenue and test volume, along with consistent cash reimbursement and prudent expense management in the coming year with a focus on creating value for our shareholders," Mr. McDonough added. "Given our outlook, we are increasingly confident we will reach our goal of positive cash flow from operations by the fourth quarter of 2017."

Third Quarter Financial and Operating Highlights (all comparisons are with the third quarter of 2015)

Total revenues of $3.2 million, up 29%
Total test volume of 2,835, up 14%
Reproductive health revenues of $2.3 million, up 39%
Reproductive health test volume of 1,483, up 17%
Gross margin of 54.0%, up from 43.6%
Number of billable customers of 257, up 10%
Cash collections at new record of $3.1 million, or 95% of total revenue, up 29%

Volumes Revenues (in 000’s)
Q3 ’16 Q3 ’15 # Δ % Δ Q3 ’16 Q3 ’15 $ Δ % Δ
Prenatal 294 272 22 8 % $ 408 $ 368 $ 40 11 %
Miscarriage analysis 990 866 124 14 % 1,622 1,145 477 42 %
PGS 199 127 72 57 % 286 149 137 92 %
Subtotal – reproductive health 1,483 1,265 218 17 % 2,316 1,662 654 39 %
Pediatric 505 509 (4 ) (1 %) 589 558 31 6 %
Subtotal 1,988 1,774 214 12 % 2,905 2,220 685 31 %
FISH and karyotyping 847 721 126 17 % 306 261 45 17 %
Total – all tests 2,835 2,495 340 14 % 3,211 2,481 730 29 %
Royalties 37 45 (8 ) (18 %)
Total revenues $ 3,248 $ 2,526 $ 722 29 %


Volumes Revenues (in 000’s)
9 Mo’s. ’16 9 Mo’s. ’15 # Δ % Δ 9 Mo’s. ’16 9 Mo’s. ’15 $ Δ % Δ
Prenatal 860 936 (76 ) (8 %) $ 1,203 $ 1,214 $ (11 ) (1 %)
Miscarriage analysis 2,886 2,664 222 8 % 4,701 3,467 1,234 36 %
PGS 566 157 409 261 % 759 189 570 302 %
Subtotal – reproductive health 4,312 3,757 555 15 % 6,663 4,870 1,793 37 %
Pediatric 1,454 1,557 (103 ) (7 %) 1,646 1,687 (41 ) (2 %)
Subtotal 5,766 5,314 452 9 % 8,309 6,557 1,752 27 %
FISH and karyotyping 2,497 2,125 372 18 % 881 735 146 20 %
Total – all tests 8,263 7,439 824 11 % 9,190 7,292 1,898 26 %
Royalties 137 112 25 22 %
Total revenues $ 9,327 $ 7,404 $ 1,923 26 %

Financial Results

Three Months Ended September 30, 2016 and 2015

Total revenues for the third quarter of 2016 increased 29% to $3.2 million from $2.5 million for the third quarter of 2015. Reproductive health diagnostic test revenue, which includes prenatal microarrays, miscarriage analysis and preimplantation genetic screening (PGS), increased 39% to $2.3 million and testing volume increased 17% to 1,483. The third quarter 2016 revenue increase was driven primarily by higher test volume for reproductive health diagnostics, higher average revenue per test particularly for miscarriage analysis and PGS tests, and from an increase in the number of billable customers, which reached 257 during the third quarter of 2016 compared to 234 in the prior-year period.

Total operating expenses were $4.1 million for the third quarter of 2016 compared with $4.2 for the prior-year period. The decrease was due primarily to lower sales and marketing and research and development expenses, partially offset by higher general and administrative expenses due to higher personnel, investor relations and consulting costs and higher cost of services as a result of higher test volume. Gross margin for the third quarter of 2016 improved to 54.0% from 43.6% for third quarter of 2015.

The net loss attributable to common stockholders for the third quarter of 2016 was $856,000, or $0.38 per share, compared with a net loss attributable to common stockholders for the third quarter of 2015 of $1.7 million, or $2.00 per share, an improvement of $831,000.

Nine Months Ended September 30, 2016 and 2015

Total revenues for the first nine months of 2016 increased 26% to $9.3 million from $7.4 million for the first nine months of 2015. Revenues for the first nine months of 2016 included $9.2 million in diagnostic services revenue and $137,000 in royalty revenues.

Operating expenses for the first nine months of 2016 were $12.9 million compared with $12.4 million for the prior-year period, with the increase mainly due to higher general and administrative expenses and higher cost of services resulting from increased testing volumes, partially offset by lower sales and marketing expenses. Gross margin improved to 52.9% for the first nine months of 2016 from 44.8% for the first nine months of 2015.

The net loss attributable to common stockholders for the first nine months of 2016 was $5.2 million, or $3.48 per share, compared to $6.0 million, or $7.21 per share in 2015. The net loss attributable to common stockholders in 2016 reflected one-time, non-cash charges of $1.9 million related to deemed dividends from the issuance of Series F convertible preferred stock and warrants in the $8.0 million public offering that closed on March 24, 2016. This increase was partially offset by the reversal of the $890,000 Series E deemed dividend recognized in 2015 from the repurchase of those securities upon closing of our Series F public offering, partially reduced by the $656,000 deemed dividend paid to the Series E investors in February of 2016.

The Company reported $4.3 million in cash, cash equivalents and short-term investments as of September 30, 2016, compared with $3.9 million as of December 31, 2015. The Company used $813,000 and $3.4 million in cash to fund operating activities during the quarter and nine months ended September 30, 2016, respectively, compared with $1.5 million and $4.2 million used to fund operating activities during the comparable 2015 periods, respectively. The significant decreases in net cash used to fund operating activities for the 2016 periods resulted primarily from improved cash reimbursement of $3.1 million and $8.5 million for the three and nine months ended September 30, 2016, respectively, compared with $2.4 million and $7.0 million for the three and nine months ended September 30, 2015, respectively.