On October 27, 2016 Cytokinetics, Inc. (Nasdaq:CYTK) reported total revenues for the third quarter of 2016 were $59.0 million, compared to $7.9 million, during the same period in 2015 (Press release, Cytokinetics, OCT 27, 2016, View Source;p=RssLanding&cat=news&id=2216748 [SID1234516067]). The net income for the third quarter was $31.9 million, or $0.80 and $0.74 per basic and diluted share, respectively. This is compared to the net loss for the same period in 2015 of $(8.8) million, or $(0.23) per basic and diluted share. As of September 30, 2016, cash, cash equivalents and investments totaled $86.3 million and the Company received an additional $65.0 million in October 2016, from the expanded collaboration with Astellas Pharma, Inc. ("Astellas"), which was effective in September 2016.

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"We had a very productive quarter advancing our growing portfolio of novel mechanism drug candidates," said Robert I. Blum, Cytokinetics’ President and Chief Executive Officer. "We are especially pleased to be moving omecamtiv mecarbil into GALACTIC-HF with agreement from FDA on key elements of a SPA and look forward to finalizing the protocol in collaboration with Amgen. We also made great progress completing enrollment in VITALITY-ALS and initiating VIGOR-ALS, the open-label extension trial for patients with ALS who have completed VITALITY-ALS. Finally, it’s gratifying to have again expanded our collaboration with Astellas and to align our interests for tirasemtiv and CK-2127107 in ALS and other indications, while advancing another next-generation fast skeletal muscle activator into pre-clinical development. We believe the activities of the past quarter demonstrate the power of our muscle biology platform and the promise of innovations arising from our pioneering research and development."

Recent Highlights and Upcoming Milestones

Cardiac Muscle Program

omecamtiv mecarbil

Announced the advancement of omecamtiv mecarbil to a Phase 3 clinical trials program. The first Phase 3 trial, GALACTIC-HF (Global Approach to Lowering Adverse Cardiac Outcomes Through Improving Contractility in Heart Failure), to be conducted by Amgen in collaboration with Cytokinetics, is designed to evaluate the effect of treatment with omecamtiv mecarbil compared with placebo on the time to cardiovascular death or first heart failure event, whichever comes first, in approximately 8,000 subjects with chronic heart failure with reduced ejection fraction receiving standard of care therapy.
Announced additional results from COSMIC-HF (Chronic Oral Study of Myosin Activation to Increase Contractility in Heart Failure), a Phase 2 trial evaluating omecamtiv mecarbil in patients with chronic heart failure, showing that omecamtiv mecarbil may improve symptoms versus placebo in patients with moderate to severe heart failure symptoms at baseline after 20 weeks of double-blind treatment, as measured by the Kansas City Cardiomyopathy Questionnaire Total Symptom Score, one of the sub-domains of a self-administered questionnaire that measures quality-of-life in patients with heart failure. The results were presented at the 20th Annual Heart Failure Society of America Scientific Meeting in Orlando, FL.

Reached agreement with FDA on key elements of GALACTIC-HF through a Special Protocol Assessment (SPA). Details of the protocol are being finalized with regulators.
Expect to initiate sites for GALACTIC-HF in the fourth quarter of 2016.
Skeletal Muscle Program

tirasemtiv

Announced the completion of patient enrollment in VITALITY-ALS (Ventilatory Investigation of Tirasemtiv and Assessment of Longitudinal Indices after Treatment for a Year in ALS), an international Phase 3 clinical trial of tirasemtiv in patients with ALS. VITALITY-ALS is designed to assess the effects of tirasemtiv versus placebo on slow vital capacity (SVC) and other measures of skeletal muscle strength in patients with ALS. VITALITY-ALS enrolled more than 700 patients.
Convened the second Data Monitoring Committee Meeting for VITALITY-ALS to review unblinded safety and efficacy data; the Committee recommended continuing the trial without modifications to the protocol.
Amended our collaboration agreement with Astellas to provide an option right for the development and commercialization of tirasemtiv outside of North America, Europe and select other countries.
Announced the first patient has been enrolled in VIGOR-ALS (Ventilatory Investigations in Global Open-Label Research in ALS), an open-label extension clinical trial designed to assess the long-term safety and tolerability of tirasemtiv, in patients with ALS who have completed their participation in VITALITY-ALS.
Expect data from VITALITY–ALS in the fourth quarter of 2017.
CK-2127107

Amended our collaboration agreement with Astellas to enable the development of CK-2127107, under an agreed plan for the potential treatment of patients with ALS.
Continued enrollment of the ongoing Phase 2 clinical trial of CK-2127107 in patients with spinal muscular atrophy (SMA) in collaboration with Astellas.
Expect to complete enrollment of Cohort 1 in the Phase 2 clinical trial of CK-2127107 in patients with SMA in the fourth quarter of 2016. Expect data from this clinical trial in first half of 2017.
Expect Astellas to complete enrollment in a Phase 2 clinical trial of CK-2127107 in patients with COPD in 2017.
Pre-Clinical Research

Announced the initiation of IND-enabling studies for a next-generation fast skeletal muscle activator under our collaboration with Astellas.
Extended our joint research program with Astellas focused on the discovery of next-generation skeletal muscle activators through 2017.
Continued research activities under our joint research program with Amgen directed to the discovery of next-generation cardiac muscle activators and under our joint research program with Astellas directed to the discovery of next-generation skeletal muscle activators. In addition, company scientists continued independent research activities directed to our other muscle biology programs.
Corporate

Announced that the Federal Trade Commission granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) in connection with the 2016 amendment to the License and Collaboration Agreement initially executed between Cytokinetics and Astellas Pharma Inc., in 2013 and amended in 2014.

Recently received the upfront payment of $65 million from Astellas related to the amendment to our collaboration agreement.

Received a $2 million milestone payment related to the initiation of IND-enabling studies for a next-generation fast skeletal muscle activator under our collaboration with Astellas.

Earned a $150,000 milestone payment related to our collaboration with MyoKardia.
Announced the continuation and expansion of our partnership with The ALS Association in the fight against ALS, including renewal of our Gold Level Sponsorship of the National Walks to Defeat ALS and Platinum Level Sponsorship for initiatives led by The ALS Association’s Golden West Chapter.
Financials

Revenues for the third quarter of 2016 were $59.0 million, compared to $7.9 million during the same period in 2015. Revenues for the third quarter of 2016 included $53.0 million of license revenues, $3.0 million of research and development revenues and $2.0 million of milestone payments from our collaboration with Astellas, $0.6 million in research and development revenues from our collaboration with Amgen, $0.3 million in research and development revenues from our collaboration with ALSA and $0.2 million in milestone revenue from our collaboration with MyoKardia. Revenues for the same period in 2015 were comprised of $4.1 million of license revenues and $3.2 million of research and development revenues from our collaboration with Astellas, and $0.6 million of research and development revenues from our collaboration with Amgen. The increase in revenues for the third quarter of 2016, compared with the same period in 2015, was mainly due to the license revenue associated with the expansion of the Astellas collaboration agreement, which was effective in September 2016.

Total research and development (R&D) expenses for the third quarter of 2016 were $19.3 million, compared to $11.6 million for the same period in 2015. The $7.7 million increase in R&D expenses for the third quarter of 2016, compared with the same period in 2015, was primarily due to an increase of $6.6 million in outsourced pre-clinical and clinical costs mainly associated with the ongoing VITALITY-ALS trial, and an increase of $1.1 million in personnel related expenses due to increased headcount costs and increased non-cash stock compensation expense.

Total general and administrative (G&A) expenses for the third quarter of 2016 were $7.2 million compared to $5.3 million for the same period in 2015. The $1.9 million increase in G&A expenses for the third quarter of 2016, compared to the same period in 2015, was primarily due to an increase of $1.3 million in personnel related expenses due to increased headcount and increased non-cash stock compensation expense, an increase of $0.4 million in outsourced costs related to commercial development and information technology, and an increase of $0.2 million in corporate and patent legal fees.

Revenues for the nine months ended September 30, 2016 were $73.3 million, compared to $18.9 million for the same period in 2015. Revenues for the first nine months of 2016 included $59.0 million of license revenues, $9.5 million of research and development revenues and $2.0 million of milestone payments from our collaboration with Astellas, $1.8 million of research and development revenues from our collaboration with Amgen, $0.8 million in research and development revenues from our collaboration with ALSA and $0.2 million in milestone payment revenue from our collaboration with MyoKardia. Revenues for the same period in 2015 included $8.8 million of license revenues and $8.2 million of research and development revenues from our collaboration with Astellas, and $1.9 million of research and development revenues from our collaboration with Amgen.

Total R&D expenses for the nine months ended September 30, 2016 were $42.6 million, compared to $33.1 million for the same period in 2015. The $9.5 million increase in R&D expenses in the first nine months of 2016, over the same period in 2015, was primarily due to an increase of $9.5 million in outsourced clinical costs, an increase of $3.5 million in personnel related expenses due to increased headcount costs and increased non-cash stock compensation expense, partially offset by a decrease of $3.6 million in outsourced preclinical costs mainly associated with clinical manufacturing activities. The increase in outsourced clinical costs was comprised of an increase of $14.0 million in outsourced clinical costs mainly associated with VITALITY-ALS, offset by a $4.5 million litigation settlement in June 2016 from a contract research organization for BENEFIT-ALS, our Phase 2 clinical trial which was concluded in 2014.

Total G&A expenses for the nine months ended September 30, 2016 were $21.1 million, compared to $14.1 million for the same period in 2015. The $7.0 million increase in G&A spending in the first nine months of 2016 compared to the same period in 2015, was primarily due to an increase of $3.3 million in personnel related expenses due to increased headcount costs and increased non-cash stock compensation expense, an increase of $1.9 million in outsourced costs related to commercial development, grants and sponsorships, and accounting and finance, and an increase of $1.6 million in corporate and patent legal fees.

The net income for the nine months ended September 30, 2016, was $7.8 million, or $0.20 and $0.19 per basic and diluted share, respectively, compared to a net loss of $(28.3) million, or $(0.73) per basic and diluted share, for the same period in 2015.

Financial Guidance

Cytokinetics also updated its financial guidance for 2016. The company anticipates cash revenue will be in the range of $84 to $87 million, cash R&D expenses will be in the range of $65 to $67 million, and cash G&A expenses will be in the range of $23 to $26 million. This guidance excludes approximately $13.5 million in unearned revenue from the 2014 amendment of our collaboration with Astellas, which will be recognized in 2016 under generally accepted accounting principles, as well as any potential future milestones that may be achieved in accordance with our collaboration agreements with our partners Amgen and Astellas. We expect a milestone payment from Amgen of approximately $27 million relating to the start of GALACTIC-HF in the fourth quarter 2016. The guidance includes $15 million in cash revenue under the 2016 amendment to our collaboration with Astellas, which will be recorded under generally accepted accounting principles once Astellas exercises its option to add tirasemtiv to the collaboration. This guidance also excludes an estimated $7.2 million in non-cash related operating expenses primarily related to stock compensation expense.

On October 27, 2016 Adaptive Biotechnologies, the leader in combining next-generation sequencing (NGS) and expert bioinformatics to profile T- and B-cell receptors of the adaptive immune system, reported that the National Comprehensive Cancer Network (NCCN) revised their clinical practice guidelines recommending the use of highly sensitive diagnostic tools, including NGS, to assess the presence of measurable residual disease (MRD) in Multiple Myeloma (Press release, Adaptive Biotechnologies, OCT 27, 2016, View Source [SID1234516105]). Results from these new innovative clinical tools can help inform treatment decisions for active symptomatic patients as well as those undergoing maintenance treatment.

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These clinical practice guidelines recommend the use of highly sensitive diagnostic tools with the ability to detect at least 1 cell among 100,000 normal cells and advise that testing should occur after each treatment stage (induction, high-dose therapy/ACST, consolidation, and maintenance) at times of suspected complete response. This unanimous recommendation from 27 of the nation’s leading experts in the field of Multiple Myeloma treatment and research signals a shift in the management of patients and supports regular assessment of MRD by new validated clinical tools. For more information, go to: View Source

"Advanced diagnostic tools are transforming patient management in Multiple Myeloma and other lymphoid malignancies," said C. Ola Landgren, MD, PhD, Chief, Myeloma Service at Memorial Sloan Kettering Cancer Center. "Robust new diagnostic tools along with advanced new treatment options are enabling clinicians to respond with the optimal intervention at the right time, which is changing the natural course of this disease."

"The approval of incredible new treatments for blood cancers continues to elevate the need for robust diagnostic tools, and we are excited that the NCCN recognizes the importance of regular MRD assessment throughout the care and management of Multiple Myeloma patients," said Chad Robins, President, Chief Executive Officer and Co-Founder of Adaptive Biotechnologies. "Adaptive is highly committed to providing a robust validated assay with the ability to assess levels of residual disease down to 1 cell in 1,000,000 cells using our proprietary clonoSEQ Assay. Making this important clinical tool available to patients around the world is a priority for Adaptive and supports our mission to improve patient care."

About Minimal Residual Disease


Minimal/measurable residual disease (MRD) refers to cancer cells that may remain in the body of a person with lymphoid cancer after treatment. These cells can be present at levels undetectable by traditional morphologic, microscopic examination of blood, bone marrow or a lymph node biopsy. Sensitive molecular technologies, such as the next-generation sequencing utilized by the Adaptive Biotechnologies clonoSEQ Assay, are needed for reliable detection of MRD at levels below the limits of traditional assessment.

About the clonoSEQ Assay

Adaptive’s clonoSEQ Assay enables physicians to utilize next-generation sequencing-based measurable residual disease (MRD) detection to inform clinical decision-making for patients with lymphoid malignancies (blood cancers). With its ability to detect and identify cancer cells at a level as low as one per one million cells, the clonoSEQ Assay is ten to one hundred times more sensitive than other methods of MRD detection, allowing physicians to address possible recurrence earlier. The clonoSEQ Assay provides consistent, accurate results which allow physicians to track specific cancer cell clones over time and optimize treatments for better patient management. Adaptive is currently seeking regulatory review and clearance of the clonoSEQ Assay.

On October 27, 2016 Celgene Corporation (NASDAQ:CELG) reported net product sales of $2,969 million for the third quarter of 2016, a 28 percent increase from the same period in 2015. Net product sales growth includes a 1 percent negative impact from currency exchange effects (Press release, Celgene, OCT 27, 2016, View Source [SID1234516035]).

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Third quarter total revenue increased 28 percent to $2,983 million compared to $2,334 million in the third quarter of 2015.

Net income for the third quarter of 2016 based on U.S. GAAP (Generally Accepted Accounting Principles), was $171 million or $0.21 per diluted share compared to a net loss of $34 million or $0.04 per diluted share in the third quarter of 2015. The results for the third quarter of 2016 include increased research and development expenses as a result of the EngMab AG acquisition. The net loss in the third quarter of 2015 reflected costs related to strategic transactions including the collaboration with Juno Therapeutics and the acquisition of Receptos.

Adjusted net income for the third quarter of 2016 was $1,263 million or $1.58 per diluted share compared to $1,011 million or $1.23 per diluted share for the third quarter of 2015.

"Continued outstanding execution by our teams around the world led to another strong quarter of revenue growth and progress advancing many of our most important strategic programs," said Mark J. Alles, Chief Executive Officer of Celgene Corporation. "Our increasing enterprise-wide momentum has us on-track to exceed key 2016 objectives and positions us well for sustained long-term growth."

Third Quarter 2016 Financial Highlights

Unless otherwise stated, all comparisons are for the third quarter of 2016 compared to the third quarter of 2015. The adjusted operating expense categories presented below exclude share-based employee compensation expense, collaboration-related upfront expense, research and development asset acquisition expense and a litigation-related loss contingency accrual expense. Please see the attached Use of Non-GAAP Financial Measures and Reconciliation of GAAP to Adjusted Net Income for further information relevant to the interpretation of adjusted financial measures and reconciliations of these adjusted financial measures to the most comparable GAAP measures, respectively.

Net Product Sales Performance

REVLIMID sales for the third quarter increased 30 percent year-over-year to $1,891 million and were driven by new patient market share gains and increased duration. U.S. sales of $1,153 million and international sales of $738 million increased 29 percent and 32 percent year-over-year, respectively.
POMALYST/IMNOVID sales for the third quarter were $341 million, an increase of 33 percent year-over-year. U.S. sales were $203 million and international sales were $138 million, an increase of 35 percent and 30 percent year-over-year, respectively. POMALYST/IMNOVID sales grew due to increased volume from duration gains.
OTEZLA sales for the third quarter were $275 million, a 98 percent increase year-over-year. U.S. sales were $245 million and international sales were $30 million. Sales were driven by market share gains and increased prescriber adoption.
ABRAXANE sales for the third quarter were $233 million, a 1 percent increase year-over-year. U.S. sales of $144 million decreased 1 percent year-over-year. International sales were $89 million.
In the third quarter, all other product sales, which include THALOMID, ISTODAX, VIDAZA and an authorized generic version of VIDAZA drug product in the U.S., were $229 million compared to $234 million in the third quarter of 2015.
Research and Development (R&D)

On a GAAP basis, R&D expenses were $1,653 million for the third quarter of 2016 compared to $1,305 million for the same period in 2015. The increase was primarily driven by a $623.3 million asset acquisition expense associated with the purchase of EngMab AG and an increase in early research and clinical trial activity, partially offset by decreases in expenses related to collaboration-related upfront expenses. Adjusted R&D expenses were $644 million for the third quarter of 2016 compared to $488 million for the third quarter of 2015.

Selling, General, and Administrative (SG&A)

On a GAAP basis, SG&A expenses were $698 million for the third quarter of 2016 compared to $550 million for the same period in 2015. The increase was primarily due to a 2016 litigation-related loss contingency accrual expense as well as an increase in donations to independent patient assistance organizations. Adjusted SG&A expenses were $591 million for the third quarter of 2016 compared to $474 million for the third quarter of 2015.

Cash, Cash Equivalents, and Marketable Securities

Operating cash flow was $723 million in the third quarter of 2016. Celgene ended the quarter with approximately $6.9 billion in cash, cash equivalents and marketable securities.

In the third quarter of 2016, Celgene purchased approximately 2.5 million of its shares at a total cost of approximately $273 million. As of September 30, 2016, the Company had approximately $4.9 billion remaining under the stock repurchase program.

2016 Guidance Updated

Previous 2016 Guidance Updated 2016 Guidance
Net Product Sales
Total Approximately $11.0B Approximately $11.2B
REVLIMID Approximately $6.8B Approximately $7.0B
GAAP diluted EPS $3.82 to $4.05 $3.12 to $3.29
Adjusted diluted EPS $5.70 to $5.75 $5.88 to $5.92
GAAP operating margin Approximately 37% Approximately 31%
Adjusted operating margin Approximately 54.0% Unchanged
Weighted average diluted shares 806M 804M
Net product sales guidance for POMALYST/IMNOVID, ABRAXANE and OTEZLA remain unchanged.

2017 Targets Updated

Total net product sales are expected to be at the high end of the range of $12.7 billion to $13.0 billion
REVLIMID net sales are expected to be more than $8.0 billion versus the previous target of approximately $8.0 billion
Adjusted diluted EPS is expected to be at the high end of the range of $6.75 to $7.00
The net product sales target for ABRAXANE and adjusted diluted share count remain unchanged.

Product and Pipeline Updates

Hematology/Oncology

A supplemental New Drug Application (sNDA) was filed with the U.S. Food and Drug Administration (FDA) for the expanded indication of REVLIMID as maintenance treatment in newly diagnosed multiple myeloma (NDMM) patients after receiving an autologous stem-cell transplant (ASCT). The sNDA was granted Priority Review and the Prescription Drug User Fee Act (PDUFA) date for the submission is February 24, 2017. In June, an application was submitted to the European Medicines Agency (EMA) for the review of REVLIMID as maintenance treatment in NDMM patients after receiving an ASCT. A decision on the European Union (EU) application is expected in the first half of 2017.
In August, the European Commission approved the inclusion of data from a pooled analysis of patients with relapsed and/or refractory multiple myeloma and impaired renal function in the IMNOVID label.
Celgene expects to submit a new drug application (NDA) to the FDA for enasidenib (AG-221) in relapsed and/or refractory acute myeloid leukemia (AML) with isocitrate dehydrogenase-2 (IDH2) mutation by year-end. The NDA will be based on data from an ongoing phase I/II trial in patients with relapsed and/or refractory AML and other advanced hematologic malignancies with an IDH2 mutation.
Data at hematology and oncology medical congresses presented in the third quarter and expected in the fourth quarter include:

Data from multiple sponsored and independent studies evaluating the use of ABRAXANE as a single agent or in combination with novel agents and novel regimens in patients with metastatic pancreatic cancer, metastatic breast cancer and non-small cell lung cancer (NSCLC) were presented during the European Society of Medical Oncology (ESMO) (Free ESMO Whitepaper) 2016 Annual Meeting in October.
Celgene’s collaboration partner Triphase Accelerator Corporation is expected to present results from a phase I trial evaluating marizomib in combination with bevacizumab in recurrent glioblastoma at the Society for Neuro-Oncology (SNO) meeting in November.
Data from the abound program of ABRAXANE in NSCLC are expected to be presented at the IASLC World Conference on Lung Cancer in December.
Data from the phase II tnAcity trial evaluating ABRAXANE in combination with gemcitabine or carboplatin in patients with triple negative breast cancer are expected at The San Antonio Breast Cancer Symposium (SABCS) in December.
At the 2016 American Society of Hematology (ASH) (Free ASH Whitepaper) annual meeting in December, data presentations expected include:
Phase III Myeloma XI trial evaluating REVLIMID as induction and maintenance therapy in patients with NDMM following ASCT.
Final overall survival data from the phase III MM-020 trial evaluating REVLIMID in combination with low-dose dexamethasone in patients with NDMM who were not candidates for stem-cell transplant.
Phase III REMARC trial comparing REVLIMID maintenance to placebo in elderly patients with diffuse large B-cell lymphoma (DLBCL) previously treated with rituximab plus chemotherapy (R-CHOP).
Phase III CONTINUUM trial comparing REVLIMID maintenance to placebo in chronic lymphocytic leukemia following second-line therapy.
Interim data from the phase III MAGNIFYTM trial with REVLIMID in combination with R-CHOP in patients with relapsed and/or refractory indolent lymphoma.
Phase Ib trial evaluating CC-122 in combination with obinutuzumab in patients with relapsed and/or refractory DLBCL or indolent non-Hodgkin’s lymphoma.
Inflammation & Immunology (I&I)

Data at I&I medical congresses presented in the third quarter and expected in the fourth quarter include:

Long-term data from the phase II RADIANCE trial evaluating ozanimod in relapsing multiple sclerosis were presented at the European Committee for Treatment and Research in Multiple Sclerosis (ECTRIMS) in September.
Phase Ib trial evaluating the effects of oral GED-0301 (mongersen) on both endoscopic and clinical outcomes in patients with active Crohn’s disease were presented at the United European Gastroenterology Week (UEGW) in October. The phase III program continues to enroll with data expected in 2018.
Phase II trial of RPC4046 in patients with eosinophilic esophagitis were presented at UEGW and the American College of Gastroenterology (ACG) meetings in October.
Phase II TOUCHSTONE trial evaluating ozanimod as induction and maintenance in patients with ulcerative colitis presented at UEGW and ACG.
Pooled 3-year data analyses from ESTEEM 1 and 2 and PALACE 1-3 trials were presented at the European Academy of Dermatology and Venereology (EADV) meeting in October.
Phase IIb trial of OTEZLA in Japanese patients with moderate-to-severe psoriasis were presented at EADV. This trial will be used to support the regulatory approval in Japan.
At the 2016 American College of Rheumatology annual meeting in November, data presentations expected include:
Three-year safety and efficacy data from the PALACE program with OTEZLA in psoriatic arthritis.
Four-year safety and efficacy data from PALACE 3 trial with OTEZLA in DMARD- and/or biologic-experienced psoriatic arthritis patients.
Pooled three-year data from the PALACE program for the enthesitis and dactylitis and HAQ-DI endpoints.
52-week data from the PSA-006 trial of OTEZLA in biologic-naïve patients with active psoriatic arthritis.
Phase II safety and dose-ranging trial of CC-220 in systemic lupus erythematosus. The second part of the phase II trial evaluating improvement in skin manifestations and improvement in the Cutaneous Lupus Area and Severity Index (CLASI) score is enrolling.
An encore presentation of the phase Ib trial evaluating the effects of oral GED-0301 on both endoscopic and clinical outcomes in patients with active Crohn’s disease are expected at the Advances in Inflammatory Bowel Diseases (AIBD) meeting in December.
Business Update

In September, Celgene completed a transaction to acquire Switzerland-based, privately-held biotechnology company EngMab AG for $625.3 million plus contingent development, regulatory and commercial milestones. EngMab’s lead molecule is EM901, a T-cell bi-specific antibody targeting B-cell maturation antigen (BCMA). The acquisition includes an additional undisclosed program. The Company plans to file an Investigational New Drug (IND) application for EM901 in late 2017. The transaction was accounted as an asset acquisition, resulting in $623.3 million of research and development expense and $2.0 million of net working capital acquired.

On October 27, 2016 Acorda Therapeutics, Inc. (Nasdaq: ACOR) reported a financial and pipeline update for the third quarter ended September 30, 2016 (Press release, Acorda Therapeutics, OCT 27, 2016, View Source [SID1234516039]).

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"Over the next 12 months, we expect multiple, potentially transformative clinical and corporate milestones," said Ron Cohen, M.D. "By year end we plan to announce topline data from our dalfampridine post-stroke walking difficulties and QD formulation studies and, in the first quarter of 2017, data from our Phase 3 CVT-301 program. Our clinical programs for tozadenant in Parkinson’s disease and CVT-427 in acute migraine are also progressing well. Regarding our defense of AMPYRA patents, we are preparing to file our post-trial brief and continuing to defend our patents vigorously."

Financial Results

The Company reported a GAAP net loss attributable to Acorda of $(12.7) million for the quarter ended September 30, 2016, or $(0.28) per diluted share. GAAP net income in the same quarter of 2015 was $3.9 million, or $0.09 per diluted share.

Non-GAAP net loss for the quarter ended September 30, 2016 was $(1.9) million, or $(0.04) per diluted share. Non-GAAP net income in the same quarter of 2015 was $3.3 million, or $0.08 per diluted share. Non-GAAP net income (loss) excludes share based compensation charges, non-cash interest expense, expenses associated with changes in the fair value of acquired contingent consideration, foreign currency gains, acquisition-related costs, and the impact of a change in accounting policy for ZANAFLEX revenue recognition. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached financial statements.

AMPYRA (dalfampridine) Extended Release Tablets, 10 mg – For the quarter ended September 30, 2016, the Company reported AMPYRA net revenue of $128.8 million compared to $117.0 million for the same quarter in 2015.

The Company is reiterating 2016 AMPYRA net sales guidance of $475-$485 million.

ZANAFLEX CAPSULES (tizanidine hydrochloride), ZANAFLEX (tizanidine hydrochloride) tablets and authorized generic capsules – For the quarter ended September 30, 2016, the Company reported combined net revenue and royalties from ZANAFLEX and tizanidine of $0.5 million compared to $26.0 million for the same quarter in 2015. Net revenue for Zanaflex for the quarter ended September 30, 2015 includes the impact of a one-time net adjustment of $22.2 million, representing the cumulative impact of the Company’s conversion from the sell-through to the sell-in method of revenue recognition.

FAMPYRA (prolonged-release fampridine tablets) – For the quarter ended September 30, 2016, the Company reported FAMPYRA royalties from sales outside of the U.S. of $2.6 million compared to $2.5 million for the same quarter in 2015.

Research and development (R&D) expenses for the quarter ended September 30, 2016 were $54.8 million, including $2.9 million of share-based compensation, compared to $43.4 million, including $2.3 million of share-based compensation, for the same quarter in 2015. R&D expenses increased due to investment in our late-stage programs, as well as the addition of Biotie R&D expenses.

The Company is reiterating 2016 R&D guidance of $195-$205 million. This guidance is a non-GAAP projection which excludes share-based compensation, as more fully described below under "Non-GAAP Financial Measures."

Sales, general and administrative (SG&A) expenses for the quarter ended September 30, 2016 were $54.4 million, including $7.1 million of share-based compensation, compared to $51.1 million, including $6.7 million of share-based compensation, for the same quarter in 2015. SG&A expenses exclude transaction expenses related to the Biotie acquisition and include Biotie expenses for the quarter ended September 30, 2016.

The Company is reiterating 2016 SG&A guidance of $195-$205 million. This guidance is a non-GAAP projection which excludes share-based compensation for the Company and transaction expenses related to the Biotie acquisition, as more fully described below under "Non-GAAP Financial Measures."

Provision for income taxes for the quarter ended September 30, 2016 was $3.0 million compared to a provision for income taxes of $17.8 million for the same quarter in 2015.

At September 30, 2016, the Company had cash, cash equivalents and investments of $127.9 million.

Third Quarter 2016 Highlights

AMPYRA (dalfampridine)
AMPYRA revenue for the third quarter of 2016 was $128.8 million, up 10% from the third quarter of 2015. This represents the 14th consecutive quarter of double-digit, year-over-year growth for AMPYRA, which was launched in 2010.
A District Court trial for the Company’s litigation against four generic companies seeking ANDA approvals concluded in September 2016. Post-trial briefing by the parties is expected to be completed in November.
Dalfampridine in Post-Stroke Walking Difficulties (PSWD)
The Company expects to announce topline data from an unblinded analysis of the twice-daily (BID) clinical trial in the fourth quarter of 2016. Results from multi-dose testing of a once-daily (QD) formulation of dalfampridine will be disclosed concurrently.
CVT-301 in Parkinson’s Disease
The Company expects last patient out (LPO) in the Phase 3 CVT-301 efficacy and safety study by the end of 2016.
Topline data from the Phase 3 efficacy and safety study is expected in the first quarter of 2017.
CVT-427 in Migraine
Upon successful completion of its ongoing Phase 1 special population studies, the Company is planning to begin a Phase 2 study in the first half of 2017.
Corporate
On September 30, Acorda acquired the remaining approximately 3% of Biotie’s fully diluted capital stock pursuant to Finnish redemption proceedings, and with 100% of the shares, completed the acquisition of Biotie. Under Finnish law, the purchase price for the 3% of the shares will be determined in accordance with the redemption proceedings.
In October, Michael Rogers, CFO, left the Company. David Lawrence, Chief of Business Operations, has assumed the role of Chief, Business Operations and Principal Accounting Officer. Andrew Hindman, Chief Business Development Officer, has assumed responsibility for Financial Planning and Analysis and Investor Relations.

On October 27, 2016 Integra LifeSciences Holdings Corporation (NASDAQ:IART) reported its financial results for the third quarter ending September 30, 2016 (Press release, Integra LifeSciences, OCT 27, 2016, View Source [SID1234516072]).

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Highlights:

Third quarter revenue increased 10.6% over the prior-year quarter to $250.3 million, and year-to-date revenue grew 14.8% over the prior year period;
Organic revenue increased 9.5% over the prior-year quarter, and year-to-date organic revenue grew 9.7% over the prior-year period;
Both GAAP and adjusted gross margin increased 230 basis points over the prior-year quarter to 64.3% and 69.3%, respectively;
GAAP net income increased to $20.1 million, or $0.50 per share, versus a loss of $31.9 million in the third quarter of 2015;
Adjusted net income increased 33.7% to $36.1 million and adjusted earnings per share of $0.93 increased 24%, compared to the third quarter of 2015;
Operating cash flow was $46.8 million in the third quarter, more than double the prior-year quarter; free cash flow conversion exceeded 75% on a trailing twelve-month basis; and,
The Company is maintaining its previously issued 2016 full-year sales guidance range of $992 million to $1.002 billion, raising organic growth guidance to a range of 9.0% to 9.5% and increasing the low end of its diluted adjusted EPS guidance by $0.04 to a new range of $3.47 to $3.53.
Total revenues for the third quarter were $250.3 million, reflecting an increase of $24.0 million, or 10.6%, over the third quarter of 2015. Both global segments contributed to the growth, with revenue in Orthopedics and Tissue Technologies and Specialty Surgical Solutions increasing by 14.7% and 8.4%, respectively, compared to the prior year.

Excluding the revenue contribution from acquisitions, discontinued products, and the effect of currency exchange rates, revenues increased 9.5% over the third quarter of 2015.

"We are seeing consistent and solid organic growth across both our global segments driven by our differentiated products, leading brand positions, new product introductions and end market growth," said Peter Arduini, Integra’s President and Chief Executive Officer. "Double-digit growth outside the United States in both segments reflects improved execution of our international strategy."

The Company reported GAAP net income of $20.1 million, or $0.50 per diluted share, for the third quarter of 2016, compared to a GAAP net loss of $31.9 million, or $0.90 per diluted share, for the third quarter of 2015. Results for the third quarter of 2015 included a $35.6 million non-cash tax charge to establish a valuation allowance for certain deferred tax assets associated with the SeaSpine separation.

Adjusted measures discussed below are computed with the adjustments to GAAP reporting set forth in the attached reconciliation.

Adjusted net income for the third quarter of 2016 was $36.1 million, or $0.93 per share, compared to adjusted net income of $27.0 million, or $0.75 per share, in the third quarter of 2015.

Adjusted EBITDA for the third quarter of 2016 was $58.6 million, or 23.4% of revenue, compared to $47.7 million, or 21.1% of revenue, in the third quarter of 2015.

Operating cash flow for the third quarter was $46.8 million, more than double the prior-year period. Trailing twelve month adjusted free cash flow conversion ended September 30, 2016, was 75.6%, versus 73.4% in the prior year.

Outlook for 2016

Based on third quarter results, the Company is maintaining its full-year 2016 revenue guidance in the range of $992 million to $1.002 billion. Guidance for full-year 2016 organic revenue growth is being increased to a new range of 9.0% to 9.5%, up from 9% previously. The Company is raising the low end of its full-year GAAP and adjusted earnings per share guidance range by $0.04, to a new range of $1.82 – $1.88 and $3.47 – $3.53, respectively, mainly due to a lower effective tax rate.

"We executed on our operational and financial plans in the third quarter, which drove double-digit revenue growth, a record adjusted gross margin, EBITDA margin expansion of 230 basis points and over 20% improvement in adjusted earnings per share," said Glenn Coleman, Integra’s Chief Financial Officer. "We are on track to meet our full-year 2016 financial objectives and are well positioned to achieve the 2018 financial targets provided at our analyst meeting last November."

In the future, the Company may record, or expects to record, certain additional revenues, gains, expenses, or charges as described in the Discussion of Adjusted Financial Measures below that it will exclude in the calculation of adjusted EBITDA and adjusted earnings per share for historical periods and in providing adjusted earnings per share guidance.