On July 27, 2017 Seattle Genetics, Inc. (NASDAQ: SGEN) reported financial results for the second quarter ended June 30, 2017 (Press release, Seattle Genetics, JUL 27, 2017, View Source [SID1234519911]).

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The company also highlighted ADCETRIS (brentuximab vedotin) commercialization and clinical development accomplishments, enfortumab vedotin (ASG-22ME) clinical activities, as well as progress with its pipeline of antibody-drug conjugates (ADCs) and other proprietary programs.

"During the second quarter, we delivered record ADCETRIS revenues and achieved three key development milestones for the program: reporting positive top-line data from the ECHELON-1 trial in frontline advanced classical Hodgkin lymphoma, submitting an application for approval to the FDA for cutaneous T-cell lymphoma, and entering into a clinical collaboration agreement with Bristol-Myers Squibb for an additional pivotal trial in relapsed/refractory Hodgkin lymphoma," said Clay Siegall, Ph.D., President and Chief Executive Officer of Seattle Genetics. "Over the remainder of 2017, our key activities will include reporting full data from the ECHELON-1 trial planned at the American Society of Hematology (ASH) (Free ASH Whitepaper) annual meeting in December, submitting a supplemental Biologics License Application to the FDA based on the ECHELON-1 data, and initiating a pivotal trial of enfortumab vedotin in metastatic urothelial cancer under our collaboration with Astellas."

ADCETRIS Program Highlights

ECHELON-1 Phase 3 Trial Results: Seattle Genetics and its ADCETRIS partner Takeda announced that the phase 3 ECHELON-1 clinical trial met its primary endpoint of a statistically significant improvement in modified progression-free survival (PFS) versus the control arm as assessed by an Independent Review Facility (hazard ratio=0.770; p-value=0.035). The two-year modified PFS rate for patients in the ADCETRIS arm was 82.1 percent compared to 77.2 percent in the control arm. The safety profile was consistent with that known for the single-agent components of the combination regimen. An abstract will be submitted for full data presentation at the American Society of Hematology (ASH) (Free ASH Whitepaper) annual meeting to be held December 9-12, 2017. ECHELON-1 evaluated ADCETRIS as part of a combination regimen in newly diagnosed patients with advanced classical Hodgkin lymphoma.
ECHELON-1 Approval Application: Seattle Genetics expects to submit by the end of 2017 a supplemental Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for approval of ADCETRIS in frontline advanced classical Hodgkin lymphoma. A submission to Health Canada for this indication is also planned by Seattle Genetics, and Takeda plans to submit the results to regulatory authorities in its territory.
ALCANZA Approval Application: Seattle Genetics submitted to the FDA a supplemental BLA based on data from the phase 3 ALCANZA trial, which were recently published in The Lancet, and two phase 2 investigator-sponsored trials of ADCETRIS in patients with cutaneous T-cell lymphoma (CTCL). ADCETRIS previously received Breakthrough Therapy Designation for the most common subtypes of CTCL: mycosis fungoides and primary cutaneous anaplastic large cell lymphoma.
ECHELON-2 Phase 3 Trial: ECHELON-2 is a phase 3 trial in frontline CD30-expressing mature T-cell lymphoma (MTCL), also known as peripheral T-cell lymphoma (PTCL). Based on review of pooled, blinded data, Seattle Genetics has observed a lower rate of reported PFS events than anticipated at this time. The company plans to discuss with the FDA the potential to unblind the trial prior to achieving the target number of PFS events specified by the statistical design. Based on the length of follow-up, the company believes the primary endpoint data will be mature in 2018, and continues to expect to report top-line data next year.
CHECKMATE 812 Phase 3 Trial Initiation: Seattle Genetics and Bristol-Myers Squibb have initiated a pivotal phase 3 clinical trial evaluating ADCETRIS plus nivolumab (Opdivo) versus ADCETRIS alone in patients with relapsed/refractory or transplant-ineligible advanced classical Hodgkin lymphoma.
Health Canada Approval: Health Canada granted non-conditional approval for ADCETRIS in Hodgkin lymphoma patients at high risk of relapse following autologous transplant based on positive data from the phase 3 AETHERA clinical trial.
ADCETRIS is not currently approved for use in CTCL, frontline Hodgkin lymphoma, frontline MTCL or in combination with nivolumab.

Enfortumab Vedotin Program Highlights

Registrational Trial: Seattle Genetics and its collaborator Astellas plan to initiate in the second half of 2017 a pivotal phase 2 trial of single-agent enfortumab vedotin for metastatic urothelial cancer patients who have been previously treated with checkpoint inhibitor therapy. The single-arm trial is designed to enroll approximately 120 patients and could support potential registration under the FDA’s accelerated approval regulations.
Combination Clinical Trial: Seattle Genetics and Astellas are planning a phase 1b trial of enfortumab vedotin in combination with checkpoint inhibitors to begin late in 2017 for patients with metastatic urothelial cancer.
Other Recent Activities

SGN-LIV1A Combination Trial: Seattle Genetics entered into a clinical collaboration agreement with Genentech, a member of the Roche Group, for the evaluation of SGN-LIV1A in combination with atezolizumab (TECENTRIQ) in patients with metastatic triple-negative breast cancer (TNBC). The phase 1b/2 clinical trial will evaluate the combination as second-line therapy as part of Roche’s MORPHEUS trial.
Vadastuximab Talirine (SGN-CD33A): Seattle Genetics discontinued the phase 3 CASCADE clinical trial in frontline older patients with acute myeloid leukemia (AML) after reviewing unblinded data indicating a higher rate of deaths in the vadastuximab talirine-containing arm versus the control arm of the trial. In addition, the company suspended patient enrollment and treatment in all of its vadastuximab talirine clinical trials. Seattle Genetics is reviewing the data to determine future plans for the program.
Polatuzumab Vedotin PRIME Designation: Roche announced that the European Medicines Agency (EMA) granted PRIME (PRIority MEdicines) designation to polatuzumab vedotin in combination with rituximab and bendamustine for relapsed or refractory diffuse large B-cell lymphoma (DLBCL). Polatuzumab vedotin is an ADC utilizing Seattle Genetics’ proprietary technology.
Second Quarter and Six Months 2017 Financial Results

Total revenues in the second quarter and six month periods ended June 30, 2017 increased to $108.2 million and $217.4 million, respectively, compared to $95.4 million and $206.6 million from the same periods in 2016. Revenues included:

ADCETRIS net sales in the second quarter of $74.3 million, a 12 percent increase from net sales of $66.2 million in the second quarter of 2016. For the year-to-date, ADCETRIS sales were $144.7 million, compared to $124.9 million for the year-to-date period in 2016, a 16 percent increase.
Royalty revenues in the second quarter of 2017 of $12.4 million, compared to $9.2 million in the second quarter of 2016. For the year-to-date in 2017, royalty revenues were $29.4 million, compared to $41.5 million for the first six months of 2016. Royalty revenues are primarily driven by international sales of ADCETRIS by Takeda. Royalty revenues for the year-to-date period in 2016 included a $20.0 million sales milestone payment from Takeda earned in the first quarter of 2016.
Amounts earned under the company’s ADCETRIS and ADC collaborations totaling $21.5 million in the second quarter and $43.3 million for the first six months of 2017, compared to $20.0 million and $40.2 million for the same periods in 2016.
Total costs and expenses for the second quarter of 2017 were $167.5 million, compared to $128.8 million for the second quarter of 2016. For the first six months of 2017, total costs and expenses were $336.0 million, compared to $261.0 million in the first six months of 2016. The increase in 2017 costs and expenses was primarily driven by investment in enfortumab vedotin, vadastuximab talirine, ADCETRIS and the company’s pipeline programs.

Non-cash, share-based compensation cost for the first six months of 2017 was $32.0 million, compared to $24.3 million for the same period in 2016.

Net loss for the second quarter of 2017 was $56.4 million, or $0.39 per share, compared to a net loss of $32.7 million, or $0.23 per share, for the second quarter of 2016. For the six months ended June 30, 2017, net loss was $116.4 million, or $0.82 per share, compared to a net loss of $53.2 million, or $0.38 per share, for the six months period ended June 30, 2016.

As of June 30, 2017, Seattle Genetics had $473.0 million in cash, cash equivalents and investments.

2017 Financial Outlook

Seattle Genetics increased its expectations for 2017 ADCETRIS net product sales in the U.S. and Canada to a range of $290 million to $310 million.

On July 27, 2017 Ipsen (Euronext: IPN; ADR: IPSEY), a global specialty-driven biopharmaceutical group, reported financial results for the first half of 2017 (Press release, Ipsen, JUL 27, 2017, View Source [SID1234519893]).

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H1 2017 Highlights

Strong operating performance of 18.8%1 Group sales growth and Core Operating Income margin improvement by 1.2 points to 26.2% of sales
Specialty Care sales growth of 23.1%1 reflects continued Somatuline momentum and includes contribution of key new products Cabometyx and Onivyde
Consumer Healthcare sales growth of 1.3%1 including contribution of newly acquired products
Upgraded full year 2017 guidance of Specialty Care sales growth greater than 24.0%1, slight growth1 of Consumer Healthcare sales, and Core Operating Income margin greater than 25.0% of sales
H1 2017 Key figures

tableau 1

David Meek, Chief Executive Officer of Ipsen, stated: “Our performance in the first half of 2017 exceeded expectations, leading to an improved financial outlook for the full year. Sales grew in the first half by an impressive 19% year-on-year and core operating margin improved by 1.2 points, both driven by Specialty Care performance. In the second half of the year, we expect Somatuline to continue along its positive growth trajectory and also an increasing contribution from our new products Cabometyx in Europe and Onivyde in the U.S. We remain focused on the successful execution of the commercial portfolio as well as the transformation of our R&D model to build an innovative and sustainable pipeline.”

Full year 2017 upgraded guidance

Following the strong performance in the first half of 2017, the Group updates its financial targets for the full year 2017:

Specialty Care sales growth upgraded to greater than +24.0%, reflecting the strong momentum for Somatuline and Cabometyx;
Revised slight growth of Consumer Healthcare, reflecting primarily lower sales expected in the second half for Prontalgine following a decree from the French Minister of Health on July 12, 2017 for all medicines containing codeine (e.g. Prontalgine), dextromethorphan, ethylmorphine or noscapine to be available by prescription only to prevent misuse;
Core Operating Income margin upgraded to greater than 25.0% of sales, based on the improved sales guidance and assuming additional investments to support the Cabometyx and Onivyde launches, increased R&D spend and higher employee variable compensation.
tableau 2

Definition of Core Financial Measures

Effective December 31st, 2016, Ipsen updated its definition of Core financial measures (Core Operating income, Core consolidated net profit, Core EPS) to exclude the amortization of intangible assets (excluding software) and the gain or loss on disposal of fixed assets.

These performance indicators do not replace IFRS indicators, and should not be relied upon as such.

Reconciliations between IFRS H1 2016/2017 results and the newly defined Core financial measures are presented in Appendix 4 and in the “Reconciliation from Core consolidated net profit to IFRS consolidated net profit” table on page 13.

Below is a reconciliation of the Core Operating Income from the previous definition to the new reported definition:

tableau 3

Review of the first half 2017 results

Note: Unless stated otherwise, all variations in sales are stated excluding foreign exchange impacts.

Group sales reached €919.5 million, up 18.8% year-on-year.

Specialty Care sales reached €764.6 million, up 23.1%, driven by the strong growth of Somatuline and the contribution of €28.6 million of key new products Cabometyx (mainly sales from Germany and France) and Onivyde (with first sales booked in the second quarter following the closing of the transaction in early April 2017). Somatuline growth of 31.8% was driven by a continued growth in North America, and a solid performance throughout Europe. Dysport growth was fueled by the good performance of our partner Galderma in North America and Europe but still impacted by importation issues related to the temporary cancellation of the certificate of Good Manufacturing Practices (cGMP) in Brazil. Decapeptyl sales reflect good volume growth in most geographies but also some continued price pressure, notably in China.

Consumer Healthcare sales reached €154.8 million, driven by the good performance of Smecta thanks to the retail strategy in China and a positive sales dynamic in Russia, as well as the contribution of the recent acquisitions of new OTC products (including Prontalgine in France) and the new products from Akkadeas Pharma in Italy. This performance was partly offset by some continued pressure in emerging markets like Algeria and Russia.

Core Operating Income totaled €240.5 million, up 25.7%, driven by the strong Specialty Care sales growth and reflects increased commercial investments mainly for the new products Cabometyx and Onivyde.

Core operating margin reached 26.2% of sales, up 1.2 points.

Core consolidated net profit was €169.2 million, compared to €145.7 million in 2016, up 16.2% and impacted by higher financial and income tax expenses.

Fully diluted core earnings per share grew by 15.7% to reach €2.04, compared to €1.76 in 2016.

IFRS Operating income was €176.4 million, up 1.0% compared to €174.6 million in 2016 after higher amortization of intangible assets from Cabometyx and Onivyde, and costs associated primarily with Onivyde integration and R&D restructuring expenses. Operating income margin at 19.2% is down 3.6 points compared to the first half of 2016.

IFRS Consolidated net profit was €125.9 million versus €133.3 million in 2016 after higher financial and income tax expenses.

IFRS Fully diluted EPS (Earning per share) was €1.52 versus €1.61 in 2016.

Free cash flow reached €94.9 million, up by €21.3 million, driven by the improvement in Operating Cash Flow, partially compensated by higher restructuring costs and financial expenses.

Closing net debt reached €669.4 million at the end of June 2017, versus a cash position of €17.3 million at the end of June 2016 reflecting the acquisitions completed during the first half of 2017 for Onivyde, the Consumer Healthcare product portfolio and the equity stake in Akkadeas Pharma.

The interim financial report, with regard to regulated information, is available on the Group’s website, www.ipsen.com, under the Regulated Information tab in the Investor Relations section.

On July 27, 2017 United Therapeutics Corporation (NASDAQ: UTHR) reported its financial results for the second quarter ended June 30, 2017 (Press release, United Therapeutics, JUL 27, 2017, View Source [SID1234519904]).

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“Our second quarter total net revenues reached $445 million, our highest quarterly net revenue level ever,” said Martine Rothblatt, Ph.D., United Therapeutics Chairman and Chief Executive Officer. “We continue to believe that Orenitram is well-positioned given the large and growing number of pulmonary arterial hypertension (PAH) patients in need of a true prostacyclin analogue therapy following their use of other oral therapies, and we think we are beginning to see the early signs of this transition reflected in Orenitram’s 21% growth in second quarter net revenues as compared to the second quarter of 2016. We are also advancing a growing number of pipeline priorities such as our new chemical entity esuberaprost, which has fully enrolled its phase III BEAT study, our phase III studies of new indications related to pulmonary fibrosis and heart failure, and our new organ manufacturing technologies, since lung transplantation is currently the only curative treatment for PAH.”

Key financial highlights include (dollars in millions, except per share data):

Three Months Ended
June 30,

Percentage

2017

2016

Changes

Revenues

$
444.6

$
412.6

8
%
Net (loss) income

$
(56.0)

$
206.1

(127)
%
Non-GAAP earnings(1)

$
199.2

$
207.2

(4)
%
Net (loss) income, per diluted share

$
(1.25)

$
4.39

(128)
%
Non-GAAP earnings, per diluted share(1)

$
4.37

$
4.42

(1)
%

(1) See definition of non-GAAP earnings, a non-GAAP financial measure, and a reconciliation of net income to non-GAAP earnings below.
Financial Results for the Three Months Ended June 30, 2017 compared to the Three Months Ended June 30, 2016

Revenues

The following table presents the components of total revenues (dollars in millions):

Three Months Ended
June 30,

Percentage

2017

2016

Change

Net product sales:

Remodulin

$
157.7

$
158.9

(1)
%
Tyvaso

104.2

107.0

(3)
%
Adcirca

120.6

90.9

33
%
Orenitram

46.0

38.0

21
%
Unituxin

16.1

17.8

(10)
%
Total revenues

$
444.6

$
412.6

8
%
Revenues for the three months ended June 30, 2017 increased by $32.0 million compared to the same period in 2016. The growth in revenues resulted from the following: (1) a $29.7 million increase in Adcirca net product sales; and (2) an $8.0 million increase in Orenitram net product sales. These increases were partially offset by a $2.8 million decrease in Tyvaso net product sales, a $1.7 million decrease in Unituxin net product sales, and a $1.2 million decrease in Remodulin net product sales.

Expenses

Cost of product sales. The table below summarizes cost of product sales by major category (dollars in millions):

Three Months Ended
June 30,

Percentage

2017

2016

Change

Category:

Cost of product sales, excluding share-based compensation

$
19.3

$
20.0

(4)
%
Share-based compensation benefit(1)

(0.4)

—

n/a

Total cost of product sales

$
18.9

$
20.0

(6)
%

(1) Refer to Share-based compensation (benefit) expense below for discussion.
Research and development expense. The table below summarizes research and development expense by major category (dollars in millions):

Three Months Ended
June 30,

Percentage

2017

2016

Change

Category:

Research and development, excluding share-based compensation

$
61.6

$
37.0

66
%
Share-based compensation benefit(1)

(1.8)

(1.8)

0
%
Total research and development expense

$
59.8

$
35.2

70
%

(1) Refer to Share-based compensation (benefit) expense below for discussion.
Research and development, excluding share-based compensation. The increase in research and development expense of $24.6 million for the three months ended June 30, 2017, as compared to the same period in 2016, was driven by the expansion of our pipeline programs to treat cardiopulmonary diseases and cancer and to develop technologies in organ manufacturing. Research and development expense for the treatment of cardiopulmonary diseases increased by $8.5 million for the three months ended June 30, 2017, as compared to the same period in 2016, due to increased spending on several clinical and non-clinical studies, including FREEDOM-EV, INCREASE and SOUTHPAW, and the development of new drug delivery devices. Research and development expenses for cancer-related projects increased by $6.9 million for the three months ended June 30, 2017, as compared to the same period in 2016, driven by an increase in spending on clinical studies of dinutuximab in adult patients with small cell lung cancer. Research and development expenses for our organ manufacturing projects increased by $9.3 million for the three months ended June 30, 2017, as compared to the same period in 2016, due to increases in preclinical work on technologies designed to increase the supply and distribution of transplantable organs and tissues.

Selling, general and administrative expense. The table below summarizes selling, general and administrative expense by major category (dollars in millions):

Three Months Ended
June 30,

Percentage

2017

2016

Change

Category:

General and administrative, excluding share-based compensation

$
51.6

$
44.2

17
%
Sales and marketing, excluding share-based compensation

15.5

24.7

(37)
%
Share-based compensation expense(1)

0.3

3.3

(91)
%
Total selling, general and administrative expense

$
67.4

$
72.2

(7)
%

(1) Refer to Share-based compensation (benefit) expense below for discussion.
General and administrative, excluding share-based compensation. The increase in general and administrative expense of $7.4 million for the three months ended June 30, 2017, as compared to the same period in 2016, was driven by a $6.7 million increase in legal fees incurred to defend our intellectual property rights and to cooperate with the request from the U.S. Department of Justice for documents regarding our support of 501(c)(3) organizations that provide financial assistance to patients.

Sales and marketing, excluding share-based compensation. The decrease in sales and marketing expense of $9.2 million for the three months ended June 30, 2017, as compared to the same period in 2016, was driven by a $5.2 million decrease in external consulting and marketing related expenses and a $3.2 million decrease in compensation and related costs associated with the 2016 consolidation of the sales and marketing staff.

Share-based compensation (benefit) expense. The table below summarizes share-based compensation (benefit) expense by major category (dollars in millions):

Three Months Ended
June 30,

Percentage

2017

2016

Change

Category:

Share tracking awards plan

$
(14.9)

$
(14.4)

(3)
%
Stock options

12.2

15.3

(20)
%
Other(1)

0.8

0.6

33
%
Total share-based compensation (benefit) expense

$
(1.9)

$
1.5

(227)
%

(1) Includes expense related to restricted stock units and employee stock purchase plan.
Share tracking awards plan. We re-measure the fair value of share tracking awards at the end of each financial reporting period. Changes in the share tracking award liability resulting from such re-measurements are recorded as adjustments to share-based compensation (benefit) expense. Decreases in our stock price will generally result in a reduction in the share tracking award liability.

Estimated Loss Contingency

We are engaged in settlement negotiations with the U.S. Department of Justice (DOJ) to resolve an investigation related to our support of 501(c)(3) organizations that provide financial assistance to patients. During the second quarter of 2017, we recorded a $210 million accrual relating to this matter. The accrual was recorded in other current liabilities on the consolidated balance sheets and as an operating expense on the consolidated statements of operations. This matter is described in more detail in Note 12—Litigation—Department of Justice Subpoena, to our consolidated financial statements included within our Quarterly Report on Form 10-Q for the period ended June 30, 2017.

Impairment of Cost Method Investment

During the quarter ended June 30, 2017, one of our cost method investments in a privately-held company experienced an event triggering an impairment analysis to evaluate the recoverability of our investment. We determined that the current fair value of our investment was lower than its carrying value, resulting in an impairment charge of $46.5 million. As of June 30, 2017, the adjusted carrying value of our investment in this company is $53.5 million.

Income Tax Expense

The provision for income taxes was $100.2 million for the three months ended June 30, 2017 as compared to $79.6 million for the same period in 2016. The provision for income taxes is based on an estimated effective tax rate for the entire year. The estimated annual effective tax rate is subject to adjustment in subsequent quarterly periods if components used to estimate the effective tax rate are updated or revised. Our effective tax rate as of June 30, 2017 and June 30, 2016, was approximately 60 percent and approximately 32 percent, respectively. Our 2017 effective tax rate increased compared to 2016 primarily due to the $210.0 million accrual relating to our DOJ negotiations and our $46.5 million impairment charge on a cost method investment, neither of which currently meets the criteria for tax deductibility.

Share Repurchase

In May 2017, we paid $250.0 million to enter into an accelerated share repurchase agreement (ASR) with Citibank, N.A. (Citibank). Under the ASR, we will repurchase a variable number of our shares subject to upper and lower stock price limits that establish the minimum and maximum number of shares that can be repurchased. The final number of shares to be repurchased under the ASR will be determined based on the average of the daily volume weighted average price of our common stock over a specified period ending on the contract termination date. The ASR is scheduled to terminate during the fourth quarter of 2017; however, Citibank can accelerate termination of the agreement at its option. Pursuant to the terms of the ASR, in June 2017, Citibank delivered to us approximately 1.7 million shares of our common stock, representing the minimum number of shares we are entitled to receive under the ASR. Upon settlement of the ASR, we may receive additional shares of our common stock.

Non-GAAP Earnings

Non-GAAP earnings is defined as net income, adjusted for: (1) share-based compensation expense (benefit), net (including expenses relating to stock options, share tracking awards, restricted stock units and our employee stock purchase plan); (2) extraordinary, non-recurring and unusual items; and (3) tax impact on non-GAAP earnings adjustments. Beginning in the first quarter of 2017, we no longer adjust our non-GAAP results for interest expense, depreciation and amortization. We believe these changes provide a better view of the company’s regular and on-going operations. Prior year amounts reflect this change for comparability purposes.

A reconciliation of net income to non-GAAP earnings is presented below (in millions, except per share data):

Three Months Ended
June 30,

2017

2016

Net (loss) income, as reported

$
(56.0)

$
206.1

Adjusted for:

Share-based compensation (benefit) expense, net(1)

(1.9)

1.5

Estimated loss contingency(2)

210.0

—

Impairment of cost method investment(2)

46.5

—

Tax benefit (expense)(1)

0.6

(0.4)

Non-GAAP earnings

$
199.2

$
207.2

Non-GAAP earnings per share:

Basic

$
4.44

$
4.68

Diluted

$
4.37

$
4.42

Weighted average number of common shares outstanding:

Basic

44.9

44.3

Diluted

45.6

46.9

(1) We calculated the total tax impact of non-discrete quarterly non-GAAP earnings adjustments based on our actual quarterly effective income tax rates, before considering discrete items, of approximately 33 percent and approximately 28 percent for the quarters ended June 30, 2017 and 2016, respectively.

(2) These non-GAAP earnings adjustments are currently not considered tax deductible.

On July 27, 2017 Evotec AG (Frankfurt Stock Exchange: EVT, TecDAX, ISIN: DE0005664809) reported an integrated drug discovery collaboration with STORM Therapeutics ("STORM") to develop new small molecule epigenetic drugs for oncology and other therapeutic areas (Press release, Evotec, JUL 27, 2017, View Source [SID1234519900]). The focus will be on a range of newly discovered RNA modulating enzyme targets.

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Evotec and STORM have been collaborating since 2016 in high-throughput screening and structural biology to identify hits against two of Storm’s RNA modulating targets. The agreement has been expanded to support STORM’s chemistry efforts on additional novel targets. Evotec will use its broad drug discovery platform to develop the compounds against these novel RNA targets.

STORM was founded based on pioneering work in the Kouzarides & Miska labs at the University of Cambridge to tackle diseases through drugging of RNA modulating enzymes. STORM is the only company harnessing the power of RNA epigenetics as a new area of important biology.

Dr Mario Polywka, Chief Operating Officer of Evotec, commented: "We are excited to be part of this extended drug discovery collaboration with STORM which is targeting this novel class of RNA modulating enzymes. This integrated drug discovery collaboration showcases our industry leading drug discovery platform and expertise and shows how it can be applied to the most novel drug targets."

Keith Blundy, CEO of STORM Therapeutics, added: "We are very happy to further expand this relationship with Evotec. At STORM, our vision is to become the world’s first company to deliver a disease-modifying agent that works by targeting RNA modulating enzymes. The combination of our understanding of the unique biology of our multiple targets and the infrastructure we have in place with Evotec will enable us to accelerate the development of novel small molecule drug candidates."
No financial details were disclosed.

RNA AND RNA EPIGENETICS
RNA (ribonucleic acid) is the only direct product of the human genome and as mRNA acts as the template for the synthesis of all proteins, the molecular machines of the cell. RNA is also known to be a key player in cellular decision-making, particularly in the form of non-coding RNA (ncRNA) such as microRNA, piRNA and long non-coding RNA. Almost all of this RNA is chemically modified: over 100 different chemical modifications have been identified to date, catalysed by several large families of RNA-modifying enzymes. The discovery of reversible chemical modifications of RNA and their role in changing RNA activity and regulating key processes within the cell gave rise to the concept of RNA epigenetics. There is a growing understanding of the importance of RNA modifications in the development of cancer and other diseases, providing a wealth of novel therapeutic targets for drug discovery.

On July 27, 2017 TESARO, Inc. (NASDAQ: TSRO) and Takeda Pharmaceutical Company Limited (TSE:4502) reported an exclusive licensing agreement for the commercialization and clinical development of niraparib, a novel poly ADP-ribose polymerase (PARP) inhibitor (Press release, TESARO, JUL 27, 2017, View Source [SID1234519902]). This agreement includes the development of niraparib for the treatment of all tumor types in Japan, and all tumor types excluding prostate cancer in South Korea, Taiwan, Russia and Australia. Niraparib, first marketed in the U.S. in April under the brand name ZEJULA, has quickly become the most frequently prescribed PARP inhibitor in the U.S.

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Under the terms of this agreement, TESARO will receive a $100 million upfront payment and is eligible to receive additional milestone payments of up to $240 million related to the achievement of certain regulatory and commercial goals. TESARO will also be eligible to receive from Takeda tiered royalties based on a double digit percentage of net product sales. Takeda gains exclusive commercial rights for all potential future niraparib indications in Japan, and rights excluding prostate cancer in South Korea, Taiwan, Russia and Australia. Takeda will be responsible for development of niraparib in Japan and the four specified countries, including all associated expenses. Additional terms of this agreement were not disclosed.

"The niraparib development program addresses many of the most prevalent and devastating cancers worldwide. We must continue to make new treatments available to patients and, through research, further our knowledge into the full utility of this molecule," said Christophe Bianchi, President of Takeda Oncology.

"We are pleased to be collaborating with TESARO, a company we admire for its high caliber oncology expertise. This agreement represents another step in our goal of building Takeda’s robust portfolio in solid tumors and, more importantly, our commitment to patients living with cancer who desperately want — and need — new, innovative therapies."

Once-daily niraparib is the first and only PARP inhibitor that has received approval for the maintenance treatment of women with recurrent ovarian cancer, regardless of BRCA mutation or biomarker status. TESARO’s development plan currently includes clinical trials of niraparib in patients with ovarian, breast, and lung cancer. Janssen Biotech has licensed rights to develop and commercialize niraparib specifically for patients with prostate cancer worldwide, except in Japan.

"TESARO is devoted to providing transformative therapies for people bravely facing cancer, and this partnership enables us to continue to globalize our mission," said Mary Lynne Hedley, Ph.D., President and COO of TESARO. "As the largest pharmaceutical company in Japan, Takeda is recognized as a leader in oncology, and we are excited to work with the Takeda team to quickly advance niraparib for patients who are in need of new treatment options."

Niraparib is not currently approved for use in Japan, South Korea, Russia, Taiwan or Australia.

About ZEJULA (Niraparib)

ZEJULA (niraparib) is a poly(ADP-ribose) polymerase (PARP) inhibitor indicated for the maintenance treatment of adult patients with recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer who are in a complete or partial response to platinum-based chemotherapy. In preclinical studies, ZEJULA concentrates in the tumor relative to plasma, delivering greater than 90% durable inhibition of PARP 1/2 and a persistent antitumor effect. Myelodysplastic Syndrome/Acute Myeloid Leukemia (MDS/AML), including some fatal cases, was reported in patients treated with ZEJULA. Discontinue ZEJULA if MDS/AML is confirmed. Hematologic adverse reactions (thrombocytopenia, anemia and neutropenia), as well as cardiovascular effects (hypertension and hypertensive crisis) have been reported in patients treated with ZEJULA. Monitor complete blood counts to detect hematologic adverse reactions, as well as to detect cardiovascular disorders, during treatment. ZEJULA can cause fetal harm and females of reproductive potential should use effective contraception. Please see full prescribing information, including additional important safety information, available at www.zejula.com.