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Vericel Reports Record Third Quarter Revenues of $22.5 Million and Raises Full Year 2018 Revenue Guidance

On November 6, 2018 Vericel Corporation (NASDAQ:VCEL), a leader in advanced cell therapies for the sports medicine and severe burn care markets, reported financial results and business highlights for the third quarter ended September 30, 2018 and raised its full year 2018 revenue guidance (Press release, Vericel, NOV 6, 2018, View Source [SID1234530758]).
Third Quarter 2018 Financial Highlights

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Total net revenues increased 58% to $22.5 million compared to $14.3 million in the third quarter of 2017;

Gross margins of 64% compared to gross margins of 50% in the third quarter of 2017;

Net loss of $1.1 million, or $0.02 loss per share, compared to net loss of $5.4 million, or $0.16 per share, in the third quarter of 2017;

Non-GAAP adjusted EBITDA of $0.9 million compared to a loss of $2.9 million in the third quarter of 2017;

As of September 30, 2018, the company had $97.8 million in cash and short-term investments compared to $26.9 million in cash at December 31, 2017; and

Full year 2018 revenue guidance raised to $87 to $90 million compared to previous full year revenue guidance of $80 to $83 million.

Recent Business Highlights
During and since the third quarter of 2018, the company:

Reported record third quarter revenues, marking the sixth consecutive quarter with record revenues for the reported quarter;

Announced plans to increase the MACI sales force by 20%, adding a sixth sales region and increasing from 40 to 48 representatives in 2019;

Expanded MACI manufacturing capacity to meet increased MACI demand;

Appointed Dr. Jonathan Hopper as Chief Medical Officer; and

Announced acceptance of four abstract podium presentations for Epicel at the upcoming Annual North American Burn Society Conference in January 2019.

"We achieved record third quarter revenues and our consistently strong revenue growth has generated significant improvements in gross margins, profitability and cash flow," said Nick Colangelo, president and CEO of Vericel. "Based on the strength of our performance year to date and the continued momentum in MACI uptake, we have raised our full year 2018 revenue guidance and plan to further expand the MACI sales force to meet an expanded addressable market."
Third Quarter 2018 Results
Total net revenues for the quarter ended September 30, 2018 were $22.5 million, which included $16.4 million of MACI (autologous cultured chondrocytes on porcine collagen membrane) net revenue and $6.0 million of Epicel (cultured epidermal autografts) net revenue, compared to $9.9 million of MACI net revenue and $4.4 million of Epicel net revenue, respectively, in the third quarter of 2017.
Gross profit for the quarter ended September 30, 2018 was $14.3 million, or 64% of net revenues, compared to $7.1 million, or 50% of net revenues, for the third quarter of 2017.
Total operating expenses for the quarter ended September 30, 2018 were $15.7 million compared to $11.1 million for the same period in 2017. The increase in operating expenses was primarily due to $1.2 million in service fees paid to MACI pharmacy distributors, a $1.0 million increase in MACI sales force expenses as a result of the MACI sales force expansion, a $1.0 million increase in reimbursement support services as a result of increased MACI demand, and a $1.0 million increase in stock-based compensation expenses.
Loss from operations for the quarter ended September 30, 2018 was $1.3 million, compared to a loss of $4.0 million for the third quarter of 2017. Material non-cash items impacting the operating loss for the quarter included $1.9 million of stock-based compensation expense and $0.3 million in depreciation expense, compared to $0.8 million of stock-based compensation expense and $0.4 million in depreciation expense in the third quarter of 2017.
Other income for the quarter ended September 30, 2018 was $0.3 million compared to other expense of $1.4 million for the third quarter of 2017. The increase in other income is primarily due to income recognized upon the expiration of unexercised warrants in the current quarter compared to an expense for the change in the fair value of warrants in the third quarter of 2017.
Non-GAAP adjusted EBITDA was $0.9 million for the quarter ended September 30, 2018 compared to a loss of $2.9 million in the third quarter of 2017. See table reconciling non-GAAP measures for more details.
Vericel’s net loss for the quarter ended September 30, 2018 was $1.1 million, or $0.02 per share, compared to a net loss of $5.4 million, or $0.16 per share, for the third quarter of 2017.

As of September 30, 2018, the company had $97.8 million in cash and short-term investments compared to $26.9 million in cash at December 31, 2017.
Full Year 2018 Financial Guidance
The company now expects total net product revenues for the full year 2018 to be in the range of $87 to $90 million, compared to the previous full year revenue guidance of $80 to $83 million.
Conference Call Information
Today’s conference call will be available live at 8:30am Eastern time in the Investor Relations section of the Vericel website at View Source." target="_blank" title="View Source." rel="nofollow">View Source Please access the site at least 15 minutes prior to the scheduled start time in order to download the required audio software if necessary. To participate in the live call by telephone, please call (877) 312-5881 and reference Vericel Corporation’s third-quarter 2018 investor conference call. If calling from outside the U.S., please use the international phone number (253) 237-1173.
If you are unable to participate in the live call, the webcast will be available at View Source until November 6, 2019. A replay of the call will also be available until 11:30am (EDT) on November 11, 2018 by calling (855) 859-2056, or from outside the U.S. (404) 537-3406. The conference ID is 9585868.

Kura Oncology to Participate in Two Upcoming Investor Conferences

On November 6, 2018 Kura Oncology, Inc. (Nasdaq: KURA), a clinical-stage biopharmaceutical company focused on the development of precision medicines for oncology, reported that Troy Wilson, Ph.D., J.D., President and Chief Executive Officer, is scheduled to participate in two upcoming investor conferences (Press release, Kura Oncology, NOV 6, 2018, View Source [SID1234530755]):

A presentation at the Stifel Healthcare Conference in New York on November 13, 2018 at 8:45 a.m. ET / 5:45 a.m. PT; and

A fireside chat at the Evercore ISI HealthConX in Boston on November 27, 2018 at 4:15 p.m. ET / 1:15 p.m. PT.
A live audio webcast and replay of each presentation will be available in the Investors section of Kura Oncology’s website at www.kuraoncology.com.

Iovance Biotherapeutics Announces Updated Phase 2 Clinical Data from the Lifileucel Metastatic Melanoma Trial at the Society for Immunotherapy of Cancer’s 33rd Annual Meeting

On November 6, 2018 Iovance Biotherapeutics, Inc. (NASDAQ: IOVA), a biotechnology company developing novel cancer immunotherapies based on tumor-infiltrating lymphocyte (TIL) technology, reported that a presentation of new data from the ongoing Phase 2 lifileucel metastatic melanoma trial (C-144-01) will occur at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) 33rd Annual Meeting in Washington, D.C. from November 7-11, 2018 (Press release, Iovance Biotherapeutics, NOV 6, 2018, View Source;p=RssLanding&cat=news&id=2375545 [SID1234530754]). Dr. Amod Sarnaik, from H. Lee Moffitt Cancer Center, the lead investigator in the C-144-01 study, will discuss the new data as an oral presentation on Sunday, November 11, 2018. These results will also be presented as a poster beginning November 9, 2018. The company will also host a live webcast of its melanoma program at an event for analysts and investors on Friday, November 9, 2018 from 6:30 – 8:30pm ET during the SITC (Free SITC Whitepaper) meeting.

Highlights from the oral and poster presentations include:

An ORR of 38% from 47 consecutively dosed metastatic melanoma patients, including one complete response and 17 partial responses, four of which are unconfirmed as of October 25, 2018, pending these patients’ upcoming second assessments
A median duration of response (DOR) of 6.4 months with a range of 1.3+ to 14+ months
All patients were unsuccessfully treated with prior anti-PD-1 treatment
Mean prior systemic therapies for all patients was 3.3
The most common treatment emergent adverse events observed in this cohort to date include chills, febrile neutropenia, anaemia, decreased platelet count, pyrexia, and hypophosphataemia. Two grade 5 events occurred. One was deemed not related to lifileucel by the investigator and the other possibly related.

"The ORR from the ongoing study in post PD-1 metastatic melanoma patients treated with lifileucel continues to be well above the outcomes from the current standard of care for late-stage melanoma patients. In particular, the DOR of greater than six months is very encouraging," said Dr. Maria Fardis, Ph.D., MBA, president and chief executive officer of Iovance Biotherapeutics. "We are pleased that Dr. Sarnaik can share updated data from the C-144-01 study with the oncology community at SITC (Free SITC Whitepaper)."

As previously reported, an End of Phase 2 meeting with the FDA was held. During this meeting, the FDA acknowledged the potential acceptability of a single-arm cohort for registration. FDA has further acknowledged that conduct of a randomized Phase 3 trial may not be feasible in its intended population of advanced melanoma patients who have been treated with at least one systemic therapy including a PD-1 blocking antibody and if BRAF V600 mutation positive, a BRAF inhibitor or BRAF inhibitor with MEK inhibitor and is not required for initial registration of lifileucel. Literature suggests that available care for these patients offers approximately 10% ORR. A new cohort of 80-100 patients in C-144-01 will be enrolled with a prospective definition of the primary endpoint of ORR to be read out by a Blinded Independent Review Committee to support registration of lifileucel. This new cohort, which the company refers to as Cohort 4, will be initiated in early 2019 and is expected to be fully enrolled by late 2019/early 2020. BLA submission to FDA is expected in the second half of 2020.

The details of the SITC (Free SITC Whitepaper) presentations are as follows:

Concurrent Session 302: Clinical Trials Session, Oral Presentation

Poster Presentation

Title: Safety and efficacy of cryopreserved autologous tumor infiltrating lymphocyte therapy (LN-144, lifileucel) in advanced metastatic melanoma patients following progression on checkpoint inhibitors
Author: Amod Sarnaik, MD – H. Lee Moffitt Cancer Center & Research
Dates and times: The poster will be displayed both on Friday, November 9, 2018 from 8 a.m. – 8 p.m. ET and Saturday, November 10, 2018 8:00 a.m. – 8:30 pm ET.
Location: Hall E
Poster number: 022
Presentation: Dr. Sarnaik will moderate the poster presentation on Saturday, November 10, 2018 from 12:20 pm – 1:50 pm and 7:00 pm – 8:30 pm, local time

Iovance Biotherapeutics Reports Third Quarter 2018 Financial Results and Provides Corporate Update

On November 6, 2018 Iovance Biotherapeutics, Inc. (NASDAQ: IOVA), a biotechnology company developing novel cancer immunotherapies based on tumor-infiltrating lymphocyte (TIL) technology, reported its third quarter 2018 financial results and provided a corporate update (Press release, Iovance Biotherapeutics, NOV 6, 2018, View Source;p=RssLanding&cat=news&id=2375637 [SID1234530753]).

"We have made tremendous progress in the last several months. Following our recent end of Phase 2 meeting with the FDA, we released information about the meeting outcome and our US registration path, receipt of RMAT designation for metastatic melanoma, an abbreviated set of our latest clinical data, and conducted a successful round of financing. The company is now in a very strong financial position which will allow us to pursue our registration program to commercialize our TIL therapy," said Dr. Maria Fardis, Ph.D., MBA, president and chief executive officer of Iovance Biotherapeutics. "We intend to recruit a new cohort of patients in the C-144-01 study to support registration of lifileucel, build a commercial manufacturing facility as well as a commercial team to support our plans to bring lifileucel to patients, while we continue advancing our existing clinical programs and expand our TIL therapy into new indications."

Recent Achievements

Regulatory

Iovance received the Regenerative Medicine Advanced Therapy (RMAT) designation for lifileucel, the company’s adoptive cell therapy using its TIL technology for the treatment of patients with metastatic melanoma from the U.S. Food and Drug Administration (FDA).
Iovance held an end of Phase 2 meeting with FDA during which the agency acknowledged that a single-arm cohort as part of the C-144-01 study could be supportive of initial registration and conduct of a randomized Phase 3 trial in the patient population being enrolled may not be feasible.
Clinical

Enrollment in Cohort 2 of the global Phase 2 lifileucel metastatic melanoma study, C-144-01, reached the predefined sample size and was therefore closed.
— As announced today, new data from Cohort 2 will be presented in a poster and as an oral presentation at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) 33rd Annual Meeting in Washington, D.C. on November 10-12. The presentation will include 47 consecutively dosed patients with an objective response rate (ORR) of 38%, with a median duration of response (DOR) of 6.4 months and range of 1.3+ to 14+ months. The ORR includes one complete response and 17 partial responses, four of which are unconfirmed and pending patient’s upcoming second assessments. Patients in the study had a mean of 3.3 prior systemic therapies and all the patients had received anti-PD-1 immunotherapy.
— The most common treatment emergent adverse events observed in this cohort to date include chills, febrile neutropenia, anaemia, decreased platelet count, pyrexia, and hypophosphataemia. There were two grade 5 events reported.
— Patient enrollment in a new cohort, Cohort 4, will be initiated in early 2019. This will be a single-arm cohort for registration in metastatic melanoma in a patient population that is post PD-1 blocking antibody and, if BRAF mutation positive, a BRAF inhibitor or BRAF inhibitor with MEK inhibitor. Iovance expects to fully enroll the necessary patients into this cohort by late 2019/early 2020. Cohort 4 is expected to enroll 80-100 patients. The primary endpoint for the study is ORR as determined by Blinded Independent Central Review (BIRC).
Patient dosing continues in the C-145-04 study for cervical carcinoma. The company recently dosed its first patient in Europe. This study design is based on a Simon’s two-stage design. The first stage has been completed and enrollment in the study continues with target enrollment of 47. Preliminary data for 15 patients yielded an ORR of 27% with an early look at the DOR ranging from 2.4 to 2.5+ months. Patients in the study had a median of five prior therapies. The safety findings from this study remain consistent with previous reports. The protocol for this study has been amended to limit the number of prior therapies to no more than three and to exclude patients who have been treated with prior immunotherapy. Iovance anticipates providing an update on this study at an upcoming medical meeting in 2019.
In the C-145-03 study for head and neck cancer, to date, preliminary data for 13 patients has yielded an ORR of 31% with the DOR ranging from 2.8 to 7.6 months. The safety findings from this study is also consistent with previous reports. Patients in the study had a median of three prior therapies.
For the study in NSCLC, IOV-LUN-201, in collaboration with MedImmune, the company amended the protocol to eliminate the TIL monotherapy cohort and patients will now be enrolled for treatment with LN-145 and durvalumab. There are currently nine sites active for this trial.
The study in PD-1 naïve melanoma and head and neck patients with TIL in combination with pembrolizumab, and LN-145 as monotherapy in NSCLC patients (IOV-COM-202) is open to enrollment with two sites active.
As of October 2018, Iovance has expanded to over 90 clinical sites for its five company-sponsored studies.
Manufacturing

Iovance announced a new three-year Manufacturing Services Agreement with MaSTherCell S.A., a cell therapy-dedicated Contract Development and Manufacturing Organization (CDMO). MaSTherCell will manufacture TIL for Iovance’s European late-stage clinical trials in its commercial-ready cGMP manufacturing suites and increases Iovance’s capacity for manufacturing TIL in Europe.
Research

Under a collaboration with Ohio State University, Iovance has developed a product candidate called peripheral blood lymphocytes (PBLs). A clinical program to administer PBLs in chronic lymphocytic leukemia (CLL) patients is expected to begin in 2019.
Data from PD-1 selected TIL, one of the next generation TIL products at Iovance, will also be presented at SITC (Free SITC Whitepaper).
Corporate

In October 2018, the company closed an underwritten public offering of 25,300,000 shares of its common stock at a public offering price of $9.97 per share, before underwriting discounts. The shares sold at closing included 3,300,000 shares issued upon the exercise in full by the underwriter of its option to purchase additional shares at the public offering price less the underwriting discount. The net proceeds from the offering, after deducting the underwriting discounts and commissions and other offering expenses payable by the company, were $236.6 million.
Two U.S. patent applications covering therapeutic methods based upon Generation 2 manufacturing, which was developed at Iovance, were recently allowed.
Third Quarter 2018 Financial Results

Net loss for the third quarter ended September 30, 2018 was $33.8 million, or $0.36 per share, compared to a net loss of $22.1 million, or $0.35 per share for the same period ended September 30, 2017.

Research and development expenses were $27.9 million for the third quarter ended September 30, 2018, an increase of $11.3 million compared to $16.7 million for the third quarter ended September 30, 2017. The increase was primarily attributable to a $4.8 million increase in clinical trial costs due to; higher patient enrollment and an increase in the number of sites in the clinical trial of lifileucel for the treatment of metastatic melanoma, increased enrollment in the cervical and head and neck LN-145 clinical trials and the initiation of clinical trials in 2018 for new indications. Further, payroll and related expenses, including stock-based compensation expenses increased by $4.4 million due to a higher number of full time employees and dedicated consultants as the company expanded its internal research efforts and clinical development programs. In addition, research and alliance costs increased by $1.4 million for clinical trials run by Iovance’s alliance partners and new research initiatives and $0.7 million for the expansion of manufacturing capacity at the company’s Clinical Manufacturing Organizations (CMOs).

General and administrative expenses were $7.1 million for the third quarter ended September 30, 2018, an increase of $1.4 million compared to $5.7 million for the third quarter ended September 30, 2017. The increase was primarily attributable to a $1.5 million increase in stock-based compensation expenses due to an increase in the number of full time employees and higher stock prices during the quarter as compared to the same period in 2017.

Nine Months Ended September 30, 2018 Financial Results

Net loss for the nine months ended September 30, 2018 was $91.0 million, or $1.01 per share, compared to a net loss of $66.2 million, or $1.06 per share for the same period ended September 30, 2017.

Research and development expenses were $72.4 million for the nine months ended September 30, 2018, an increase of $21.5 million compared to $50.9 million for the same period ended September 30, 2017. The increase was primarily attributable to a $11.9 million increase in the company’s clinical trial costs for ongoing and newly initiated studies and a $10.1 million increase in payroll and related expenses, including stock-based compensation expenses, for a higher number of full time employees and expenses for services performed by third parties in support of the company’s clinical studies. Further, research and research alliance costs increased by $1.1 million as Iovance expanded its research efforts and the number of clinical development programs run by its collaborators. These increases were partially offset by a $1.5 million decrease in manufacturing costs due to higher costs in 2017 related to technical transfer activities.

General and administrative expenses were $20.9 million for the nine months ended September 30, 2018, an increase of $5.0 million compared to $15.9 million for the same period ended September 30, 2017. The increase was primarily attributable to a $4.3 million increase in payroll and related expenses, including stock-based compensation expenses, due to a higher number of full time employees and higher stock prices during 2018 and a $0.6 million increase in professional service and legal expenses.

At September 30, 2018, the company held $260 million in cash, cash equivalents, and short-term investments compared to $276.1 million at June 30, 2018. During the third quarter the company used $28.2 million for operating-related activities and received $12.1 million of proceeds from the exercise of warrants and stock options. In October 2018 the company received $236.6 in net proceeds from the issuance of common stock. The company anticipates that the year-end balance of cash, cash equivalents and short-term investments may be between $460 to $465 million.

Webcast and Conference Call
Iovance will host a conference call today at 4:30 p.m. ET to discuss these third quarter 2018 results and provide a corporate update. The conference call dial-in numbers are 1-844-646-4465 (domestic) or 1-615-247-0257 (international). The conference ID access number for the call is 8718039. The live webcast can be accessed under "News & Events" in the "Investors" section of the company’s website at View Source or you may use the link: View Source

A replay of the call will be available from November 6, 2018 at 7:30 p.m. ET to November 13, 2018 at 8:30 p.m. ET. To access the replay, please dial 1-855-859-2056 (domestic) or 1-404-537-3406 (international) and reference the access code 8718039. The archived webcast will be available for thirty days in the Investors section of Iovance Biotherapeutics’ website at View Source.

NIH Awards Grant for Research on APX3330 as Treatment for Cancer Cachexia

On November 6, 2018 Apexian Pharmaceuticals reported that Researchers will continue to explore the impact of Apexian’s target molecule, APX3330, on cancer cachexia with additional grant funding from the National Institutes of Health (NIH) National Cancer Institute (NCI). Cancer cachexia is weight loss with chronic inflammation and defective metabolism, which causes roughly one-third of all cancer deaths (Press release, Apexian Pharmaceuticals, NOV 6, 2018, View Source [SID1234530752]). It is particularly prevalent in pancreatic ductal adenocarcinoma (PDAC), which has a dismal five-year survival rate.

Dr. Mark R. Kelley, Apexian Chief Scientific Officer and the Betty and Earl Herr Professor of Pediatric Oncology Research at the Indiana University Simon Cancer Center; Dr. Melissa Fishel, Research Associate Professor, Wells Center for Pediatric Research; and Dr. Teresa Zimmers, Associate Professor of Surgery at the Indiana University School of Medicine, have been working to define mechanisms of cachexia stemming from treatment in PDAC, as well as for identifying mechanism-driven, targeted anti-cachexia therapies.

"The goal of this research is to determine the anti-cachexia potential of Ref-1 inhibition, HIF-1a inhibition, or the combination in mouse models of PDAC," said Dr. Kelley. "APX3330 has proven effective at inhibiting Ref-1, and has been safe and well tolerated when taken by patients with advanced cancers in our Phase 1 clinical study."

Previous studies support Ref-1 as a target in PDAC, on-target effects of APX3330, and the use of APX3330 as a clinical agent in cancer. This study will focus on demonstrating improvement in fat/muscle mass and PDAC cachexia symptoms using APX3330. Positive results from this study would lead to immediate clinical trials using APX3330 to prevent or reverse PDAC cachexia.

"Dr. Kelley’s research on APX3330 as a Ref-1 inhibitor continues to offer promise as a treatment for cancer and cancer-related issues like cachexia and cancer chemotherapy-induced neuropathy," said Steve Carchedi, CEO of Apexian Pharmaceuticals. "As we complete our Phase I trial, we continue to aggressively pursue additional therapeutic uses for APX3330 and build on our pipeline of novel, first in class molecules."

The NIH grant of $227,554 pushes Kelley’s grant budget for research on Ref-1 inhibitors to nearly $700,000 just in 2018.