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Corvus Pharmaceuticals Reports Second Quarter 2017 Financial Results and Provides Business Update

On August 3, 2017 Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS), a clinical-stage biopharmaceutical company focused on the development and commercialization of novel immuno-oncology therapies, reported financial results for the second quarter ended June 30, 2017, and provided a business update (Press release, Corvus Pharmaceuticals, AUG 3, 2017, View Source [SID1234520021]).

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"We continue to make significant progress in advancing the clinical development of our lead product candidate, CPI-444, and other product candidates in our immuno-oncology pipeline," said Richard A. Miller, M.D., co-founder, president and chief executive officer of Corvus. "We presented results from our ongoing Phase 1/1b study at the recent ASCO (Free ASCO Whitepaper) Annual Meeting, demonstrating promising clinical activity with CPI-444 in patients with non-small cell lung cancer and renal cell cancer who are resistant or refractory to prior anti-PD-(L)1 therapy. This is a difficult-to-treat and growing patient population, as there are very few treatment options for patients who have been given checkpoint inhibitor therapy, but whose disease has either continued to advance or has returned. With CPI-444 and other product candidates in our pipeline targeting the adenosine pathway, we now have several novel agents focused on this important new target in immuno-oncology."

RECENT ACHIEVEMENTS AND UPCOMING MILESTONES
Clinical and Preclinical

Continued enrolling patients in four expansion cohorts in the ongoing disease-specific expansion part of the Phase 1/1b clinical study of CPI-444, the Company’s lead oral checkpoint inhibitor. The expanded cohorts include treatment with CPI-444 both as a single agent and in combination with atezolizumab (Tecentriq), an anti-PD-L1 antibody, in renal cell cancer (RCC) and non-small cell lung cancer (NSCLC). Corvus plans to present additional data from this study at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) 32nd Annual Meeting in November 2017.
Presented interim safety and efficacy data from 75 patients with RCC or NSCLC enrolled in the Phase 1/1b study in an oral presentation at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2017 Annual Meeting. The data showed that treatment with CPI-444 both as a single agent and in combination with atezolizumab resulted in anti-tumor activity in patients resistant or refractory to prior treatment with anti-PD-(L)1 antibodies and in patients with PD-L1 negative tumors.
Entered into a second collaboration agreement with Genentech to evaluate CPI-444 in combination with atezolizumab in a Phase 1b/2 clinical study as second-line therapy in patients with NSCLC who are resistant/refractory to prior anti-PD-(L)1 antibody therapy. Genentech and Corvus will share the costs of the trial that is expected to be initiated in the fourth quarter of 2017.
Continued to progress the anti-CD73 antibody program toward Phase 1 study initiation in the first half of 2018.
Continued to progress both A2B receptor antagonist and ITK inhibitor programs. Preclinical findings with a candidate A2B receptor antagonist indicate that it may enhance immune responses to certain tumors. These findings, which suggest the possible use of A2A receptor and A2B receptor antagonists in combination therapy, may lead to selection of a lead clinical candidate A2B receptor antagonist in 2018.
Initiated development of an in-licensed antibody-based product candidate that inhibits a novel target in the adenosine pathway.
Corporate

Held an R&D Day titled "The Adenosine Pathway: Extending the Reach of Cancer Immunotherapy." An archive of the webcast is available in the "Investors" section of the Company’s website.
Licensed global rights to an undisclosed novel immuno-oncology program, which includes a lead product candidate, from Monash University.
FINANCIAL RESULTS
At June 30, 2017, Corvus had cash, cash equivalents and marketable securities totaling $110.3 million. This compared to cash, cash equivalents and marketable securities of $134.9 million at December 31, 2016.

Research and development expenses for the three months ended June 30, 2017, totaled $12.4 million compared to $7.1 million for the same period in 2016. The increase of $5.3 million was primarily due to an increase of $3.0 million in outside clinical trial and contracted research costs associated with the Phase 1/1b clinical trial for CPI-444, an increase of $1.2 million in drug manufacturing costs for the anti-CD73 antibody program, and an increase of $0.7 million in drug manufacturing costs for the ITK program.

General and administrative expenses for the three months ended June 30, 2017, totaled $2.8 million compared to $1.7 million for the same period in 2016. The increase of $1.1 million was primarily due to an increase of $0.4 million in personnel and associated costs, primarily due to an increase in headcount, a $0.3 million increase in legal and accounting costs, and an increase of $0.3 million in costs associated with being a public company.

The net loss for the three months ended June 30, 2017, was $15.0 million compared to $8.6 million for the same period in 2016. Total stock compensation expense for the three months ended June 30, 2017, was $1.5 million compared to $1.1 million for the same period in 2016.

Bristol-Myers Squibb to Acquire IFM Therapeutics to Strengthen Oncology Pipeline Focus on Innate Immunity

On August 3, 2017 Bristol-Myers Squibb Company (NYSE:BMY) and IFM Therapeutics (IFM) reported that the companies have signed a definitive agreement under which Bristol-Myers Squibb will acquire all of the outstanding capital stock of IFM Therapeutics, a venture-backed biotech company focused on developing therapies that modulate novel targets in the innate immune system to treat cancer, autoimmunity and inflammatory disorders (Press release, Bristol-Myers Squibb, AUG 3, 2017, View Source [SID1234520020]).

The acquisition will give Bristol-Myers Squibb full rights to IFM’s preclinical STING (stimulator of interferon genes) and NLRP3 agonist programs focused on enhancing the innate immune response for treating cancer, and is an example of Bristol-Myers Squibb’s continued focus on leveraging external innovation to expand and develop its portfolio of transformative medicines. IFM’s STING agonist program includes a lead asset that accelerates the company’s efforts against this target, while the NLRP3 agonist program includes a potential first-in-class pipeline candidate.

"Targeting innate immunity pathways represents a potentially differentiated approach in immuno-oncology designed to initiate and augment immune responses that may help the body’s natural defenses better recognize and attack tumors," said Thomas Lynch, Jr., M.D., executive vice president, chief scientific officer, Bristol-Myers Squibb. "The addition of STING and NLRP3 agonist programs broadens our ability to investigate additional pathways across the immune system and complements our immuno-oncology portfolio. We look forward to advancing the development of these important programs initiated by Gary Glick, his leadership team and leading academic and industry experts across immunology and oncology."

"A comprehensive body of preclinical data support the continued research of IFM’s NLRP3 and STING agonists with a goal of uncovering their potential benefit to patients, particularly those not served by currently available cancer immunotherapeutics. Based on its deep expertise and leadership positions in immunology, oncology, and immuno-oncology, Bristol-Myers Squibb is uniquely positioned to accelerate these programs and maximize their potential," said Gary D. Glick, Ph.D., CEO and co-founder of IFM Therapeutics.

"The company is delighted by the validation this deal brings to IFM’s technology, and under the stewardship of Bristol-Myers Squibb, researching the promise it holds for potentially improving the lives of patients," said Jean-François Formela, M.D., chair of the IFM board.

Under the terms of the agreement, Bristol-Myers Squibb will pay $300 million upon closing of the transaction. IFM stockholders also will be entitled to additional contingent payments of up to $1.01 billion for each of the first products from the two programs upon the achievement of certain development, regulatory and sales milestones. Also, IFM is eligible for additional contingent milestone payments for further products resulting from these programs. In connection with the acquisition, a newly formed entity will be established by the current shareholders of IFM – IFM Therapeutics LLC – and it will retain IFM’s current personnel and facilities, as well as its remaining research programs, which include an NLRP3 antagonist program focused on curbing immune responses that lead to inflammatory diseases and fibrosis. In consideration of an additional payment at closing and future investment, Bristol-Myers Squibb will be granted at closing certain rights against the newly formed entity’s NLRP3 antagonist program, including a right of first refusal.

The transaction has been approved by the boards of directors of both companies and by the stockholders of IFM.

Bristol-Myers Squibb and IFM anticipate the transaction will close during the third quarter of 2017. Closing of the transaction is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act.

AMAG PHARMACEUTICALS ANNOUNCES SECOND QUARTER 2017 FINANCIAL RESULTS AND PROVIDES CORPORATE UPDATE

On August 3, 2017 AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG) reported unaudited consolidated financial results for the quarter ended June 30, 2017 (Press release, AMAG Pharmaceuticals, AUG 3, 2017, View Source [SID1234520016]).

Total GAAP revenue for the second quarter of 2017 increased to a record $158.4 million, 24% higher than the same period last year (and 14% higher than the first quarter of 2017). This increase was driven by sales growth across the product portfolio, particularly Makena (hydroxyprogesterone caproate injection), which grew 31%. The company reported operating income of $3.6 million in the second quarter of 2017, compared with $18.1 million in the same period last year. Non-GAAP adjusted EBITDA totaled $50.1 million in the second quarter of 2017, compared with $64.6 million in the second quarter of 2016.1

"AMAG delivered another quarter of record revenues and strong growth across our portfolio of products. That same commercial excellence is now being applied to the launch of Intrarosa, announced just last week," said William Heiden, president and chief executive officer. "We have already realized a number of significant milestones in 2017, and look forward to reaching many others in the second half of the year. The achievement of these goals is an important step on the path to building an even stronger company that develops and markets novel therapeutics to address significant unmet medical needs."

Second Quarter 2017 and Recent Business Highlights:
•
Hired and trained a new women’s health commercial team of approximately 150 people;
•
Launched Intrarosa, the first and only FDA-approved local non-estrogen product for the treatment of moderate-to-severe dyspareunia (pain during intercourse), a symptom of vulvar and vaginal atrophy (VVA), due to menopause;
•
Advanced bremelanotide development and regulatory activities to support the planned new drug application (NDA) submission in early 2018;
•
Received FDA acceptance for review of Makena subcutaneous auto-injector supplemental NDA (sNDA) and a PDUFA date of February 14, 2018;
•
Drove record quarterly sales of Makena to over $102 million;
•
Realized highest number of new family enrollments at Cord Blood Registry (CBR) since the fourth quarter of 2015;
•
Partner, Velo Bio, enrolled first patient in Phase 2b/3a study for the treatment of severe preeclampsia;
•
Achieved record quarterly sales of Feraheme and completed submission to FDA to broaden Feraheme’s label; and
•
Strengthened the balance sheet and ended the quarter with $399.2 million of cash and investments.

Second Quarter Ended June 30, 2017 (unaudited)
Financial Results (GAAP Basis)
Total revenues for the second quarter of 2017 were $158.4 million, compared with $127.4 million in the second quarter of 2016. Net product sales of Makena were $102.7 million in the second quarter of 2017, compared with $78.4 million in the same period last year. Sales of Feraheme and MuGard totaled $27.7 million in the second quarter of 2017, compared with $24.6 million in the second quarter of 2016. Service revenue from CBR totaled $28.0 million in the second quarter of 2017, compared with $24.4 million in the same period last year.

Costs and expenses, including costs of product sales and services, totaled $154.8 million in the second quarter of 2017, compared with $109.3 million for the same period in 2016. This increase was primarily due to (i) higher selling, general and administrative expenses of $29.1 million primarily related to commercial activities to support the launch of Intrarosa, including the addition of a new women’s health sales force, (ii) higher research and development expenses of $16.0 million, primarily due to development work performed by Palatin to support the NDA for bremelanotide, and (iii) higher cost of products sold of $10.2 million, of which $8.9 million was due to amortization expense related to the Makena intangible asset. Also recorded in the second quarter of 2017 was a charge of $5.8 million to acquired in-process research and development expense in connection with the closing of the company’s agreement with Endoceutics for the rights to Intrarosa.

The higher expenses in the second quarter of 2017 resulted in $3.6 million in operating income in the second quarter of 2017, a decrease of $14.4 million, as compared to $18.1 million in operating income for the same period last year. The company reported a net loss of $14.1 million, or $(0.40) per basic and diluted share, for the second quarter of 2017, compared with a net loss of $0.6 million, or $(0.02) per basic share and diluted share, for the same period in 2016. The increased net loss in the second quarter of 2017 includes a $9.5 million loss on the extinguishment of debt in connection with the early retirement of the company’s term loan and a portion of the convertible notes due in 2019.

Financial Results (Non-GAAP Basis)1
Non-GAAP revenue totaled $159.8 million in the second quarter of 2017, up from $132.5 million in the second quarter of 2016. Non-GAAP CBR service revenue totaled $29.4 million in each of the second quarters of 2017 and 2016. The difference between GAAP and non-GAAP revenue represents CBR purchase accounting adjustments related to deferred revenue.

Total costs and expenses on a non-GAAP basis totaled $109.7 million in the second quarter of 2017, compared with $67.8 million in the second quarter of 2016.

Non-GAAP adjusted EBITDA for the second quarter of 2017 was $50.1 million, resulting in an adjusted EBITDA margin of 31%. This compares to non-GAAP adjusted EBITDA of $64.6 million in the second quarter of 2016, with an adjusted EBITDA margin of 49%. The decline in adjusted EBITDA for the second quarter of 2017 is in line with the company’s expectations and stated plans to invest in the continued development of its current and future products in order to create long-term value.

Balance Sheet Highlights
As of June 30, 2017, the company’s cash and investments totaled $399.2 million and total debt (principal amount outstanding) was $861.1 million.

During the second quarter of 2017, the company issued $320 million of convertible senior notes due in 2022. The company also repurchased $158.9 million of its existing convertible senior notes due in 2019 for an aggregate purchase price of $171.3 million, including accrued interest. The company used proceeds from the convertible transactions, along with balance sheet cash, to repay the remaining balance of $321.8 million of its term loan, which was due in 2021.

"By extending our maturities and reducing our total debt by approximately $170 million, we have more financial flexibility to invest in our newest products — Intrarosa and bremelanotide, as well as continue to expand our

2

product portfolio through potential acquisitions and licensing transactions," stated Ted Myles, chief financial officer. "We are pleased with the strong second quarter and year-to-date 2017 financial performance reported today, and we are reaffirming our full year guidance."

Reaffirming 2017 Financial Guidance

2017 GAAP Guidance

2017 Non-GAAP Guidance
$ in millions

Makena sales

$410 – $440

$410 – $440
Feraheme and MuGard sales

$100 – $110

$100 – $110
CBR revenue

$110 – $120

$115 – $1253
Intrarosa

$5 – $15

$5 – $15
Total revenue

$625 – $685

$630 – $690

Net loss

($62) – ($31)2

N/A
Operating income (loss)

($23) – $272

N/A
Adjusted EBITDA

N/A

$210 – $260

Kite Announces Landmark Study of Refractory Aggressive Non-Hodgkin Lymphoma (SCHOLAR-1) Outcomes Published in the Journal BLOOD

On August 3, 2017 Kite Pharma, Inc., (Nasdaq:KITE), a leading cell therapy company, reported the publication of the first large-scale multi-institutional analysis of outcomes of patients with refractory aggressive non-Hodgkin lymphoma (NHL) in the latest electronic edition of BLOOD (Press release, Kite Pharma, AUG 3, 2017, View Source [SID1234520014]). The study, SCHOLAR-1 (Retrospective Non-Hodgkin Lymphoma Research), showed outcomes in patients with refractory aggressive NHL subtypes including diffuse large B-cell lymphoma (DLBCL), transformed follicular lymphoma (TFL) or primary mediastinal B-cell lymphoma (PMBCL) following treatment with currently available therapies:

Objective response rate of 26 percent
Complete response rate of 7 percent
Median overall survival of 6.3 months
These findings highlight the unmet medical need and provide an important benchmark for studies that address this refractory patient population.

"SCHOLAR-1 demonstrates the uniformly poor treatment outcomes for patients with aggressive non-Hodgkin lymphoma and emphasizes the need for breakthrough therapies for these refractory patients," said Christian Gisselbrecht, MD, Professor of Hematology, Saint Louis Hospital at Diderot University Paris 7, and corresponding author of the study. "Although 60 to 70 percent of non-Hodgkin lymphoma patients survive five years after rituximab-based chemotherapy and autologous stem cell transplant, nearly half of them either do not respond or relapse shortly after transplant. SCHOLAR-1 provides a rigorous measure of outcomes for these patients who do not benefit from currently available therapies, and this landmark study will serve as an important historical control for evaluating new therapeutic candidates in the field of non-Hodgkin lymphoma."

Key points and findings:

SCHOLAR-1 uses pooled, patient-level data from two of the largest randomized controlled studies in NHL, the Canadian Cancer Trials Group study Ly.12 and the Lymphoma Academic Research Organization (LYSARC) Collaborative Trial in Relapsed Aggressive Lymphoma (CORAL) study, and from two observational cohorts from MD Anderson Cancer Center and the Molecular Epidemiology Resource of the University of Iowa/Mayo Clinic Lymphoma Specialized Program of Research Excellence (IA/MC).
The analysis includes 636 patients who met criteria for refractory DLBCL, TFL and PMBCL. Refractory status was defined as progressive disease or stable disease as best response to last chemotherapy, or relapse ≤12 months post-ASCT.
While patients with relapsed/refractory NHL, a more broadly defined patient population studied in Ly.12 and CORAL, have heterogeneous outcomes to subsequent therapy, the subgroup of patients with strictly refractory NHL, as studied in SCHOLAR-1, have uniformly poor outcomes and greater unmet need.
In the refractory NHL patient pool studied in SCHOLAR-1, objective response rate was 26 percent, complete response rate was 7 percent, and median overall survival was 6.3 months.
Outcomes for the refractory NHL patient pool studied in SCHOLAR-1 were consistently poor across patient subgroups.
SCHOLAR-1 was funded through an unrestricted grant from Kite.

Agenus Reports Second Quarter 2017 Financial Results and Provides Corporate Update

On August 3, 2017 Agenus Inc. (NASDAQ: AGEN), an immuno-oncology (I-O) company with a pipeline of immune checkpoint antibodies and cancer vaccines, provided a corporate update and reported financial results for the second quarter ended June 30, 2017 (Press release, Agenus, AUG 3, 2017, View Source [SID1234520012]).

"In the second quarter, we advanced our anti-CTLA-4 and anti-PD-1 antibodies in preparation for initiating combination trials in the second half of this year. We also produced GMP grade product in our facilities in Berkeley and selected a commercial supplier for our lead antibodies. In addition, our partnering efforts are maturing and we expect to close on several transactions in the second half of this year," said Garo H. Armen, Ph.D., Chairman and CEO of Agenus. "We are committed to our path of generating potential first-in-class and best-in-class immuno-oncology agents, and doing so with speed, quality and efficiency."

Anticipated Milestones for H2 2017:

AGEN1884 (anti-CTLA-4) Phase 1 trial: complete dose-escalation and compile safety and pharmacodynamic data
AGEN2034 (anti-PD-1) Phase 1/2 trial:
Complete dose-escalation for monotherapy, define optimal combination dose and collect safety and receptor occupancy data
Recruit patients with second line cervical cancer
AGEN1884+AGEN2034 Phase 1b trial: commence combination trial
AutoSynVax (neoantigen vaccine): immunological readouts expected in patients with advanced malignancies
Advance our cell therapy spin off efforts
Secure substantial funds from existing agreements and future transactions
Recent Highlights:

AGEN1884 interim data presented at ASCO (Free ASCO Whitepaper):
Safe at doses up to 3 mg/kg
Partial response in a patient with angiosarcoma with 92% reduction in tumor burden at 0.1 mg/kg dose (since ASCO (Free ASCO Whitepaper) this patient has experienced a complete response)
QS-21 Stimulon update:
GSK’s shingles vaccine containing Agenus’ QS-21 Stimulon adjuvant showed strong immunogenicity in patients previously treated with standard of care (Merck’s Zostavax)
U.S. regulatory approval of Shingrix is anticipated in Q4
Manufacturing readiness:
Agenus West successful GMP production of AGEN2034 at 1,000L scale
Selection of CMOs for production of commercial grade material for planned registrational trials
Second Quarter 2017 Financial Results

Cash, cash equivalents and short-term investments were $96.8 million at June 30, 2017 compared to $76.4 million as of December 31, 2016.

For the six months ended June 30, 2017, Agenus reported a net loss of $48.8 million, or $0.51 per share, compared with a net loss for the same period in 2016 of $60.1 million or $0.69 per share. The decrease in net loss for the six months ended June 30, 2017, compared to the net loss for the same period in 2016, was primarily due to the accelerated milestone payment received from Incyte during the first quarter of 2017. Our operating expenses increased $9.2 million over the same period in 2016.

For the second quarter ended June 30, 2017, Agenus reported a net loss of $31.7 million, or $0.32 per share, compared with a net loss for the second quarter of 2016 of $28.3 million, or $0.33 per share. The increase in net loss for the three months ended June 30, 2017, compared to the net loss for the same period in 2016, was primarily due to the later stage advancement of our programs.