On August 9, 2016 Ohr Pharmaceutical, Inc. (Nasdaq:OHRP), an ophthalmology research and development company, reported results for its third quarter ended June 30, 2016 (Press release, Ohr Pharmaceutical, AUG 9, 2016, View Source [SID:1234514559]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"The start of the Phase 3 registration program for Squalamine during the quarter marked a significant milestone in our overall development program for our lead drug candidate," said Jason Slakter, MD, Chief Executive Officer of Ohr. "There remains a significant need for new treatment options that can enhance visual acuity gains in wet AMD and provide a non-invasive treatment option. We believe that Squalamine, when administered as part of a combination therapy, meets these needs and has the potential to set a new standard of care. We look forward to an exciting second half of calendar 2016."

Third Quarter Highlights

Commenced enrollment in the Phase 3 clinical development program to investigate Squalamine lactate ophthalmic solution, 0.2% ("Squalamine", also known as OHR-102) as a treatment to improve visual acuity for patients with wet AMD.
The Phase 3 program includes two clinical trials designed as double-masked, placebo-controlled, multicenter, international studies of Squalamine administered topically twice a day in patients with newly diagnosed wet AMD, in combination with Lucentis injections.
The primary endpoint in both studies is a measurement of visual acuity gain at nine months, which is the most clinically meaningful endpoint for wet AMD patients. Subjects will be followed to two years for safety.
Appointed David M. Brown, MD to serve as the chair of the Steering Committee for the Phase 3 clinical program of Squalamine in wet-AMD.
Dr. Brown is Clinical Professor of Ophthalmology at Baylor College of Medicine, vice-chair for research at the Blanton Eye Institute, Houston Methodist Hospital, and partner at Retina Consultants of Houston.
Completed an in vivo study demonstrating sustained pharmacological anti-angiogenic activity of OHR3031, an angiogenesis inhibitor
Single intravitreal injection of microparticles containing OHR3031 produced clinically meaningful and statistically significant efficacy six weeks after dose administration in a rabbit model of laser-induced CNV.
Dose response was observed in the reduction of average CNV lesion areas with OHR3031 compared to vehicle treatment, with the highest dose exhibiting a statistically significant effect at Week 6.
Magnitude of difference in average CNV lesion size for the high dose of OHR-3031 compared to vehicle treatment at 6 weeks was comparable to that seen at 2 weeks with a currently approved anti-VEGF agent conducted in a previous study.
OHR3031 was developed using SKS sustained release technology
Presented two posters on the Squalamine Phase 2 IMPACT study and OHR3031 in vivo studies at the Association for Research in Vision and Ophthalmology (ARVO) Conference in May.
Financial Results for Third Quarter ended June 30, 2016

For the third quarter ended June 30, 2016, the Company reported a net loss of approximately $7.7 million, or ($0.24) per share, compared to a net loss of approximately $3.3 million, or ($0.11) per share in the same period of 2015.
For the third quarter ended June 30, 2016, total operating expenses were approximately $7.6 million, consisting of approximately $1.7 million in general and administrative expenses, $5.6 million in research and development expenses, and $0.3 million in depreciation and amortization. This compares to total operating expenses in the same period of 2015 of approximately $3.3 million, consisting of $1.6 million in general and administrative expenses, $1.5 million in research and development expenses, and $0.3 million in depreciation and amortization.
At June 30, 2016, the Company had cash and cash equivalents of approximately $17.6 million. This compares to cash and equivalents of approximately $28.7 million at September 30, 2015.
Financial Results for the Nine-Months ended March 31, 2016

For the nine months ended June 30, 2016, the Company reported a net loss of approximately $19.1 million, or ($0.61) per share, compared to a net loss of approximately $11.3 million, or ($0.41) per share in the same period of 2015.
For the nine months ended June 30, 2016, total operating expenses were approximately $17.8 million, consisting of $5.8 million in general and administrative expenses, $11.8 million of research and development expenses, and $0.9 million in depreciation and amortization. This compares to total operating expenses of $14.3 million in the same period of 2015, comprised of approximately $5.7 million in general and administrative expenses, $7.4 million in research and development expenses, and $0.9 million in depreciation and amortization.

On August 9, 2016 Myriad Genetics, Inc. (NASDAQ:MYGN) reported financial results for its fiscal fourth-quarter 2016, provided an update on recent business highlights and provided fiscal first-quarter 2017 and fiscal year 2017 financial guidance (Press release, Myriad Genetics, AUG 9, 2016, View Source [SID:1234514554]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"Fourth-quarter performance met our expectations, and we continue to make substantial progress on advancing our product portfolio and growing Myriad into a larger, more diversified personalized medicine company," said Mark C. Capone, president and CEO of Myriad. "Myriad is on track to deliver on its five year strategic goals. We continue to be the worldwide leader in hereditary cancer testing, and our portfolio diversification efforts are accelerating with substantive volume growth and reimbursement for new commercial products, pivotal validations for our pipeline products, the acquisitions of Assurex Health and Sividon, and significant international expansion. Given the multibillion dollar market opportunity for our portfolio, we remain confident that we can deliver better health outcomes for patients and significant long-term value for shareholders."

Financial Highlights

Below are tables summarizing the financial results and revenue by product class for our fiscal fourth-quarter 2016 and full fiscal-year 2016:

Revenue
Fiscal Fourth-Quarter Fiscal Year
($ in millions) 2016 2015 % Change 2016 2015 % Change
Molecular diagnostic testing revenue

Hereditary cancer testing revenue $ 152.8 $ 163.8 (7 %) $ 632.3 $ 638.3 (1 %)

Vectra DA testing revenue 12.7 11.8 8 % 47.8 43.7 9 %

Prolaris testing revenue 3.5 0.7 400 % 11.3 2.1 438 %

Other testing revenue 4.8 2.5 92 % 14.3 11.4 25 %

Total molecular diagnostic testing revenue 173.8 178.8 (3 %) 705.7 695.5 2 %

Pharmaceutical and clinical service revenue 12.7 11.1 14 % 48.1 27.6 74 %

Total Revenue $ 186.5 $ 189.9 (2 %) $ 753.8 $ 723.1 4 %

Income Statement
Fiscal Fourth-Quarter Fiscal Year
($ in millions) 2016 2015 % Change 2016 2015 % Change
Total Revenue $ 186.5 $ 189.9 (2 %) $ 753.8 $ 723.1 4 %

Gross Profit 146.5 152.4 (4 %) 596.5 575.7 4 %
Gross Margin 78.6 % 80.3 % 79.1 % 79.6 %

Operating Expenses 110.8 116.2 (5 %) 429.7 441.5 (3 %)

Operating Income 35.7 36.2 (1 %) 166.8 134.2 24 %
Operating Margin 19.1 % 19.1 % 22.1 % 18.6 %

Adjusted Operating Income 39.0 48.2 (19 %) 179.5 167.3 7 %
Adjusted Operating Margin 20.9 % 25.4 % 23.8 % 23.1 %

Net Income 23.4 18.7 25 % 125.3 80.2 56 %

Diluted EPS 0.32 0.26 23 % 1.71 1.08 58 %

Adjusted EPS $ 0.36 $ 0.41 (12 %) $ 1.63 $ 1.45 12 %

Business Highlights

myRisk Hereditary Cancer
Myriad signed a new agreement with Blue Shield of California, retaining Myriad’s previous network status. Myriad ended the quarter with 65 percent of revenue under long-term contracts for its hereditary cancer business.
A new study in the New England Journal of Medicine demonstrated that in patients with advanced prostate cancer, the rate of deleterious mutations in myRisk genes was approximately 12 percent. This is consistent with other cancers that have genetic testing guidelines. Every year in the United States approximately 25,000 patients are diagnosed with advanced prostate cancer.
Myriad made the first content additions to myRisk adding three additional genes including GREMM1, POLE and POLD-1. These genes were recently added to the NCCN guidelines on genetic testing based upon their role in hereditary colon cancer.
Myriad announced the ability to customize the myRisk panel for genetics experts who are interested in ordering a subset of the myRisk genes on the full panel.

Vectra DA
Vectra DA volumes were up five percent year-over-year in the fiscal fourth-quarter with approximately 41,300 tests performed.
Myriad signed three additional private payer contracts for Vectra DA that collectively cover approximately one million lives in the United States.
At the European League Against Rheumatism (EULAR) annual meeting, Myriad presented new data showing the ability of Vectra DA to predict sustained clinical remission after discontinuation of Humira. In patients with a low Vectra DA score, 57 percent had sustained clinical remission following discontinuation of Humira. In patients with a high Vectra DA score, 60 percent experienced flare within one year of discontinuation of Humira.
In a second study presented at EULAR of 180 treatment naïve patients, the Vectra DA score was a statistically significant predictor of clinical remission with 12-month remission rates meaningfully higher in patients with a greater reduction in Vectra DA score versus those with a smaller reduction.

Prolaris
Prolaris volume increased 91 percent year-over-year and 11 percent sequentially with approximately 4,750 tests ordered.
At the American Urological Association annual meeting, Myriad presented the first study validating Prolaris exclusively in a low-risk only patient population. In 440 patients with a Gleason score of six or less, patients with a high Prolaris score had three times the rate of prostate specific mortality and eight times the rate of biochemical recurrence relative to patients with a low Prolaris score.
Myriad signed three additional private payer contracts for Prolaris that collectively cover approximately one million lives in the United States.

Companion Diagnostics
Myriad presented data from the first prospective validation of myChoice HRD in concert with TESARO’s NOVA study. In the study, which evaluated platinum-sensitive ovarian cancer patients, myChoice HRD positive patients receiving niraparib demonstrated a 9.1 month increase in progression free survival relative to patients receiving placebo.

Sividon Diagnostics Acquisition
Myriad completed the acquisition of Sividon Diagnostics during the fiscal fourth quarter and gained United States and Chinese distribution rights to EndoPredict, a best-in-class breast cancer prognostic test. Myriad announced plans to launch EndoPredict in the United States in the second half of fiscal year 2017.
A large head-to-head study comparing EndoPredict with Oncotype Dx was recently published in the Journal of the National Cancer Institute. The study, which evaluated 928 women from the TransATAC study, showed that EndoPredict "markedly outperformed" Oncotype Dx with a prognostic power that was more than four times greater. Also, EndoPredict low-risk patients had a 10-year rate of distant metastases of 5.8 percent versus low risk Oncotype Dx patients at 10.1 percent.

Assurex Health Acquisition
In August, Myriad signed a definitive agreement to acquire Assurex Health, a personalized medicine company providing treatment decision support to healthcare providers for their patients with mental health disorders. Assurex’s lead product, GeneSight Psychotropic, evaluates 12 genes known to play a significant role in psychotropic drug response and is used in patient treatment selection. Assurex performed over 150,000 GeneSight tests in Myriad’s fiscal year 2016 and generated more than $60 million in total revenue. The acquisition is subject to the satisfaction of customary closing conditions.

International
International revenues were up 93 percent year-over-year in the fourth quarter and accounted for approximately six percent of total product revenue in the quarter.
Myriad recently signed an agreement with BMI Healthcare in the United Kingdom covering Myriad’s complete testing portfolio including EndoPredict, Prolaris, Tumor BRACAnalysis CDx and hereditary cancer testing. BMI Healthcare is the largest private hospital group comprised of 59 hospitals and clinics across the UK, servicing 1,500,000 outpatient visits per year.

Share Repurchase
During the quarter, the Company repurchased approximately 1.6 million shares, or $55 million, of common stock under our share repurchase program and ended the quarter with approximately $195 million remaining on our current share repurchase authorization.
Fiscal Year 2017 and Fiscal First-Quarter 2017 Financial Guidance
Below is a table summarizing Myriad’s fiscal year 2017 and fiscal first-quarter 2017 financial guidance:

Revenue Adjusted
Earnings Per
Share GAAP Diluted
Earnings Per
Share
Fiscal Year 2017 $740-$760 million $1.00-$1.10 $0.47 – $0.57

Fiscal First-Quarter 2017 $168-$170 million $0.25-$0.27 $0.14 – $0.16

Myriad’s fiscal year 2017 financial guidance includes the impact of the Assurex Health acquisition which Myriad expects to close at the end of the fiscal first-quarter 2017.

These projections are forward-looking statements and are subject to the risks summarized in the safe harbor statement at the end of this press release. The Company will provide further details on its business outlook during its conference call today to discuss the fiscal fourth-quarter financial results and fiscal year 2017 and fiscal first-quarter 2017 financial guidance.

On August 9, 2016 Caladrius Biosciences, Inc. (NASDAQ: CLBS) ("Caladrius" or the "Company"), a cell therapy company combining an industry-leading development and manufacturing services provider through its subsidiary PCT, LLC a Caladrius Company ("PCT") with a select therapeutic development pipeline, reported financial results for the three and six months ended June 30, 2016 (Press release, Caladrius Biosciences, AUG 9, 2016, View Source [SID:1234514498]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Business highlights for the second quarter and recent weeks include:

•Achieved total revenues of $8.3 million for the second quarter of 2016, up 41% compared with $5.9 million in the second quarter of 2015;
•Achieved total operating costs and expenses reduction of 50% in the second quarter of 2016 when compared with the second quarter of 2015;
•Granted Fast Track designation from the U.S. Food and Drug Administration ("FDA") for CLBS03 for the treatment of recent onset type 1 diabetes mellitus ("T1D"), making it the first known therapeutic candidate to receive Fast Track designation for treatment of T1D;
•Granted Orphan Drug designation from the FDA for CLBS03 for the treatment of T1D with residual beta cell function;
•Expanded PCT’s relationship with Kiadis Pharma with an agreement for the manufacturing of their lead product, ATIR101, for the U.S. and Canadian Phase 3 trial in blood cancers;
•Announced the appointment of Robert A. Preti, Ph.D., the Company’s Chief Technology Officer, Senior Vice President, Manufacturing and Technical Operations, and President of PCT, as Chairman of the Alliance for Regenerative Medicine ("ARM"), the international advocacy organization representing the gene and cell therapies and broader regenerative medicine sector; and
•Licensed exclusive global rights to the Company’s tumor cell/dendritic cell technology for the treatment of ovarian cancer to AiVita Biomedical, Inc. In return, Caladrius will receive certain development milestone payments as well as royalties on sales.

Management Commentary

"We remain very pleased with our year-to-date performance as we continue to deliver on our strategic goals to grow and expand the PCT business, to reduce expenses, to advance our Phase 2 T-Rex clinical trial as a treatment for T1D and to monetize non-core assets," stated David J. Mazzo, Ph.D., Chief Executive Officer of Caladrius. "We are delighted to add Fast Track and Orphan Drug designations to CLBS03 for the treatment of T1D as they underscore the significant unmet medical need in this degenerative disease, and provide regulatory provisions that can accelerate the review process and expand our market exclusivity. We look forward to completing enrollment and treatment of the first cohort of approximately 18 patients toward the end of summer. Following the three-month post-treatment visit, an interim safety analysis will be conducted, and we expect to have these results by year-end 2016."

"We entered the second half of 2016 in a solid position to continue advancing our strategic goals and achieving our financial guidance for the year. We are delighted that a growing number of cell therapy developers are partnering with PCT to take advantage of our expertise and our quality, scalable, innovative, reliable and cost-efficient manufacturing platforms and services to advance their cellular therapies."

"Our leadership in regenerative and cell therapy was further solidified with the appointment of Dr. Robert Preti as Chairman of ARM. As a pioneer in cell therapy manufacturing and development, Dr. Preti remains at the forefront of the industry, influencing regulatory trends and policy making. ARM’s dedication to advancing regenerative medicine and cell therapies and to bringing its stakeholders together is unprecedented, and aligns with PCT’s vision of contributing to a world in which transformative cell-based therapeutics are accessible to all patients in need," concluded Dr. Mazzo.

Second Quarter Financial Highlights

Total revenues for the second quarter of 2016 increased 41% to $8.3 million compared with $5.9 million for the second quarter of 2015. Gross margin on revenues was 15% in the second quarter of 2016 compared with 1% in the second quarter of 2015.

Research and development (R&D) expenses for the second quarter of 2016 decreased 47% to $4.0 million compared with $7.6 million for the second quarter of 2015. The decrease was primarily related to lower costs subsequent to the discontinuation of the Intus Phase 3 clinical trial for metastatic melanoma as well as lower program expenses associated with the Company’s ischemic repair platform, compared with the prior-year period. These decreases were partially offset by an increase in expenses related to The Sanford Project: T-Rex Phase 2 Study in T1D.

Selling, general and administrative (SG&A) expenses decreased 46% to $4.7 million for the second quarter of 2016 compared with $8.7 million for the same period in 2015. The decrease is due to both lower equity-based compensation costs and operational and compensation-related cost reductions compared to the prior year period.

The operating loss for the second quarter of 2016 was $7.5 million compared with an operating loss of $25.7 million for the second quarter of 2015, reflecting higher revenues and gross margin, and lower R&D and SG&A expenses, as well as an impairment of intangible assets in the second quarter of 2015.

The Company reported a net loss for the second quarter of 2016 of $7.9 million, or $1.33 per share, compared with a net loss for the second quarter of 2015 of $17.2 million, or $3.84 per share.

First Half Financial Highlights

Total revenues for the six months ended June 30, 2016 increased 75% to $15.8 million compared with $9.0 million for the first six months of 2015. Gross margin for the first half of 2016 was 16% compared with a negative 1% for the first half of 2015.

R&D expenses for the first half of 2016 decreased to $9.9 million compared with $14.4 million for the first half of 2015. SG&A expenses decreased to $11.2 million for the first half of 2016 compared with $19.8 million for the same period in 2015. The first half of 2015 included expenses associated with executive management changes including one-time new hire compensation-related costs. The first half of 2016 included separation-related costs incurred during the first quarter of 2016, while equity-based compensation expenses were significantly lower in the first half of 2016 compared to the prior year period.

The operating loss for the first half of 2016 was $18.6 million compared with an operating loss of $43.8 million for the first half of 2015.

The net loss for the six months ended June 30, 2016 was $19.9 million, or $3.39 per share, compared with a net loss for the six months ended June 30, 2015 of $36.4 million, or $8.83 per share.

Balance Sheet and Cash Flow Highlights

As of June 30, 2016, Caladrius had cash and cash equivalents of $17.7 million. Net cash used in operating activities for the six months ended June 30, 2016 was $14.6 million, compared with $21.8 million for the six months ended June 30, 2015.

2016 Financial Guidance

The Company reaffirms its previous guidance as follows:

•
Consolidated Revenues: to exceed $30 million or a greater than 30% increase compared with 2015
•
Capital Improvements at PCT’s Allendale, NJ facility: ~$6 million, to be completed by end of first half of 2017
•
CLBS03 Phase 2 Study Costs in 2016: $6 million to $7 million
•
Consolidated Annual Operating Cash Burn: $25 million to $28 million in 2016, with lower operating cash burn in the second half of 2016 than in the first half of the year

On August 9, 2016 Jazz Pharmaceuticals plc (Nasdaq: JAZZ) reported financial results for the second quarter of 2016 and updated financial guidance for 2016 (Press release, Jazz Pharmaceuticals, AUG 9, 2016, View Source;p=RssLanding&cat=news&id=2194317 [SID:1234514477]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"We have made significant progress in 2016, as we continue to build the foundation for future growth by further diversifying and strengthening our hematology/oncology portfolio with the addition of Vyxeos, a late-stage product candidate for the treatment of acute myeloid leukemia, through the acquisition of Celator Pharmaceuticals," said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals. "We achieved strong organic sales growth of our key products, including a significant contribution from the U.S. launch of Defitelio, received FDA approval of our manufacturing facility in Athlone, Ireland and entered into additional corporate development transactions with the potential to bring innovative treatment options to patients."

GAAP net income attributable to Jazz Pharmaceuticals plc for the second quarter of 2016 was $111.3 million, or $1.80 per diluted share, compared to $88.1 million, or $1.40 per diluted share, for the second quarter of 2015.

The company has modified the calculation of its non-GAAP income tax provision and has reflected this modification in its 2015 and 2016 non-GAAP interim period results and full-year 2016 financial guidance in connection with the Securities and Exchange Commission’s May 2016 guidance pertaining to non-GAAP financial measures. The company’s modified calculation no longer includes the cash tax benefits the company realizes during the year from net operating losses and credits and deductible share-based compensation and now includes other deferred taxes and changes in unrecognized tax benefits. This modification does not change the amount of cash taxes that the company expects to pay in 2016 or in the future, and therefore has no impact on the company’s future expected cash flows. This modification does not reflect a change in the amount of cash taxes that the company expects to pay in 2016, or in the future, or a change to the company’s expected future cash flows.

Adjusted net income attributable to Jazz Pharmaceuticals plc for the second quarter of 2016 was $162.6 million, or $2.63 per diluted share. Without giving effect to the modification described above, adjusted net income attributable to Jazz Pharmaceuticals plc for the second quarter of 2016 would have been $174.3 million, or $2.82 per diluted share. Adjusted net income attributable to Jazz Pharmaceuticals plc for the second quarter of 2015 was $144.2 million, or $2.28 per diluted share. Without giving effect to the modification described above, adjusted net income attributable to Jazz Pharmaceuticals plc for the second quarter of 2015 was previously reported as $152.2 million, or $2.41 per diluted share. Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included in this press release.

Financial Highlights

Three Months Ended
June 30,

Six Months Ended
June 30,

(In thousands, except per share amounts and percentages)
2016

2015

Change

2016

2015

Change
Total revenues
$
381,161

$
333,747

14.2
%

$
717,171

$
643,050

11.5
%
GAAP net income attributable to Jazz Pharmaceuticals plc
$
111,282

$
88,114

26.3
%

$
185,403

$
158,814

16.7
%
Adjusted net income attributable to Jazz Pharmaceuticals plc1
$
162,584

$
144,151

12.8
%

$
295,461

$
259,666

13.8
%
GAAP EPS attributable to Jazz Pharmaceuticals plc
$
1.80

$
1.40

28.6
%

$
2.98

$
2.52

18.3
%
Adjusted EPS attributable to Jazz Pharmaceuticals plc1
$
2.63

$
2.28

15.4
%

$
4.75

$
4.12

15.3
%
____________________________

1.
Without giving effect to the modification of the calculation of non-GAAP income tax provision described above, adjusted net income attributable to Jazz Pharmaceuticals plc would have been $174.3 million, or $2.82 per diluted share, and was previously reported as $152.2 million, or $2.41 per diluted share, for the three months ended June 30, 2016 and 2015, respectively. Without giving effect to the modification described above, adjusted net income attributable to Jazz Pharmaceuticals plc would have been $315.3 million, or $5.07 per diluted share, and was previously reported as $277.2 million, or $4.40 per diluted share, for the six months ended June 30, 2016 and 2015, respectively.

Total Revenues

Three Months Ended
June 30,

Six Months Ended
June 30,
(In thousands)
2016

2015

2016

2015
Xyrem (sodium oxybate) oral solution
$
280,968

$
247,846

$
530,505

$
460,536

Erwinaze / Erwinase (asparaginase Erwinia chrysanthemi)
49,748

46,151

100,921

96,504

Defitelio (defibrotide sodium) / defibrotide
33,246

15,257

51,143

32,620

Prialt (ziconotide) intrathecal infusion
8,073

7,138

14,282

13,902

Psychiatry
3,867

9,372

10,869

18,465

Other
3,208

6,342

5,306

17,114

Product sales, net
379,110

332,106

713,026

639,141

Royalties and contract revenues
2,051

1,641

4,145

3,909

Total revenues
$
381,161

$
333,747

$
717,171

$
643,050

Net product sales increased 14% in the second quarter of 2016 compared to the same period in 2015 due to higher net product sales of Xyrem, Erwinaze and Defitelio.

Xyrem net product sales increased 13% in the second quarter of 2016 compared to the same period in 2015.

Erwinaze/Erwinase net product sales increased 8% in the second quarter of 2016 compared to the same period in 2015. While Erwinaze net product sales increased, the company expects to continue to experience inventory and supply challenges, which may result in temporary disruptions in the company’s ability to supply certain markets, including the U.S., from time to time. The company continues to work with distributors to prioritize delivery of drug to institutions for the treatment of patients who have been prescribed Erwinaze.

Defitelio/defibrotide net product sales increased $18.0 million in the second quarter of 2016 compared to the same period in 2015. The increase in net product sales was due to net sales of $9.5 million following the April 2016 launch of Defitelio in the U.S. and a significant increase in net product sales outside of the U.S.

Operating Expenses

Three Months Ended
June 30,

Six Months Ended
June 30,
(In thousands, except percentages)
2016

2015

2016

2015
GAAP:

Cost of product sales
$
23,980

$
21,813

$
47,419

$
50,111

Gross margin
93.7
%

93.4
%

93.3
%

92.2
%
Selling, general and administrative
$
122,618

$
107,132

$
251,383

$
219,520

% of total revenues
32.2
%

32.1
%

35.1
%

34.1
%
Research and development
$
39,091

$
27,833

$
70,343

$
55,014

% of total revenues
10.3
%

8.3
%

9.8
%

8.6
%
Acquired in-process research and development
$
—

$
—

$
8,750

$
—

Non-GAAP adjusted:

Cost of product sales
$
23,017

$
21,041

$
45,657

$
48,644

Gross margin
93.9
%

93.7
%

93.6
%

92.4
%
Selling, general and administrative
$
99,488

$
88,470

$
202,099

$
183,511

% of total revenues
26.1
%

26.5
%

28.2
%

28.5
%
Research and development
$
35,562

$
23,967

$
63,524

$
47,663

% of total revenues
9.3
%

7.2
%

8.9
%

7.4
%

Operating expenses changed over the prior year period primarily due to the following:

Selling, general and administrative (SG&A) expenses increased in the second quarter of 2016 compared to the same period in 2015, on a GAAP and on a non-GAAP adjusted basis, primarily due to higher headcount and other expenses resulting from the expansion of the company’s business.
Research and development (R&D) expenses increased in the second quarter of 2016 compared to the same period in 2015, on a GAAP and on a non-GAAP adjusted basis, primarily due to higher costs for clinical studies and outside services for the development of JZP-110 and line extensions for the company’s existing products.
Cash Flow and Balance Sheet

As of June 30, 2016, cash, cash equivalents and investments were $916.4 million, and the outstanding principal balance of the company’s long-term debt was $1.3 billion. Cash, cash equivalents and investments decreased from December 31, 2015 primarily due to repurchases under the company’s share repurchase program and a $150.0 million milestone payment triggered by the U.S. Food and Drug Administration (FDA) approval of Defitelio on March 30, 2016, partially offset by cash generated by the business. During the six months ended June 30, 2016, the company repurchased 1.3 million ordinary shares for $163.2 million, at an average cost of $126.74 per ordinary share.

Recent Developments

In June 2016, the company received FDA approval for its manufacturing facility in Athlone, Ireland. Xyrem and certain development product candidates will be manufactured in this facility.

On July 12, 2016, the company completed its acquisition of Celator Pharmaceuticals, Inc. for approximately $1.5 billion.

On July 12, 2016, the company amended its existing credit agreement by increasing the revolving credit facility to $1.25 billion from $750 million and extending the maturity date of the term loan facility and revolving credit facility to July 2021 from June 2020. The company used borrowings of $1.0 billion under the company’s revolving credit facility, together with cash on hand, to fund the Celator acquisition, resulting in an increase of the outstanding principal balance of long-term debt to approximately $2.3 billion.

On August 2, 2016, the U.S. Centers for Medicare and Medicaid Services approved a New Technology Add-on Payment (NTAP) for Defitelio after determining that Defitelio met the NTAP criteria for newness, substantial clinical improvement relative to existing therapies and specific cost thresholds. Beginning October 1, 2016, NTAP will provide incremental reimbursement to the standard diagnosis-related group based reimbursement for Defitelio, which should support Medicare beneficiaries’ access to Defitelio when treated in certain inpatient hospital settings.

2016 Financial Guidance*

Jazz Pharmaceuticals is updating its full year 2016 financial guidance primarily due to the acquisition of Celator Pharmaceuticals and modification of the calculation of non-GAAP income tax provision, as follows (in millions, except per share amounts and percentage):

Revenues
$1,485-$1,530
Total net product sales
$1,477-$1,522
-Xyrem net sales
$1,095-$1,130
-Erwinaze/Erwinase net sales
$190-$215
-Defitelio/defibrotide net sales
$105-$125
GAAP gross margin %
93%
Non-GAAP adjusted gross margin %1,4
93%
GAAP SG&A expenses
$499-$529
Non-GAAP adjusted SG&A expenses2,4
$400-$415
GAAP R&D expenses
$149-$161
Non-GAAP adjusted R&D expenses3,4
$135-$145
GAAP net income per diluted share
$5.66-$6.56
Non-GAAP adjusted net income per diluted share4
$9.90-$10.30
____________________________

*
Updated August 9, 2016. The company’s 2016 financial guidance remains subject to final acquisition accounting adjustments for the acquisition of Celator Pharmaceuticals.

1.
Excludes $5 million of share-based compensation expense from estimated GAAP gross margin.
2.
Excludes $78-$86 million of share-based compensation expense, $15-$22 million of transaction and integration related costs and $6 million of expenses related to certain legal proceedings and restructuring from estimated GAAP SG&A expenses.
3.
Excludes $14-$16 million of share-based compensation expense from estimated GAAP R&D expenses.
4.
See "Non-GAAP Financial Measures" below. Reconciliations of non-GAAP adjusted guidance measures are included above and in the table titled "Reconciliation of GAAP to Non-GAAP Adjusted 2016 Net Income Guidance" provided on the last page of this press release.

On August 9, 2016 Intrexon Corporation (NYSE: XON), a leader in the engineering and industrialization of biology to improve the quality of life and health of the planet, reported its second quarter and first half financial results for 2016 (Press release, Intrexon, AUG 9, 2016, View Source [SID:1234514476]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Business Highlights and Recent Developments:

The U.S. Food and Drug Administration (FDA) published final finding of no significant impact and final environmental assessment on Oxitec’s OX513A self-limiting mosquito concluding that a field trial of the Friendly Aedes in Key Haven, Florida, will not result in a significant impact on the environment;
Expanded Oxitec’s ‘Friendly Aedes aegypti Project’ in Piracicaba, Brazil to an area in the city’s center covering 60,000 residents. Releases of Friendly Aedes, the mosquito that fights the primary vector of dengue, Zika and chikungunya, began in July;
Oxitec reported results from Piracicaba’s Epidemiologic Surveillance service which showed a 91% reduction of dengue fever cases registered in the 2015/2016 dengue-year as compared to the 2014/2015 period in the CECAP/Eldorado district, an area of 5,000 residents and the initial site of the ‘Friendly Aedes aegypti Project’;
Announced Grand Cayman will use Oxitec’s Friendly Aedes to suppress wild Aedes aegypti in an effort to help eliminate diseases transmitted by this mosquito. Releases of Friendly Aedes began in July;
Announced the formation of Intrexon Crop Protection (ICP), a wholly-owned subsidiary dedicated to bio-based control of agricultural pests and diseases through the utilization of Oxitec’s diverse self-limiting gene platform for species-specific insect control, as well as the ActoBiotics system for the expression of targeted biologicals for pest and disease management programs;
Introduced Florian technology, an "on-off" regulation switch system which exhibits the capability to regulate the timing of flowering, as well as selectively activate specific plant genes, through topical application of an activator. This technology demonstrates potential for enabling a variety of commercial applications in agriculture, and the Company will focus its initial efforts on near-to-market opportunities in turf, floral, and forage industries;
Announced amendments to Exclusive Channel Collaborations (ECCs) with ZIOPHARM Oncology, Inc. (Nasdaq: ZIOP) in the fields of oncology and graft-versus-host-disease to improve alignment. Operating profit rates payable to Intrexon from ZIOPHARM on products developed under these ECCs decrease from 50% to 20%, excluding the companies’ existing collaboration with Merck Serono, the biopharmaceutical division of Merck KGaA. Economics from any future sublicensing arrangements with third party collaborators will be split evenly. Intrexon received $120 million in ZIOPHARM preferred stock along with a monthly dividend of 1% payable in additional preferred shares;
Collaborator ZIOPHARM announced plans for a Phase I clinical trial utilizing autologous T cells transduced with lentivirus to express a CD33-specific chimeric antigen receptor (CAR) in patients with relapsed or refractory acute myeloid leukemia. This will be second trial initiated at The University of Texas MD Anderson Cancer Center under the research and development agreement among ZIOPHARM, Intrexon, and MD Anderson to expeditiously move promising treatments from bench to clinic;
Entered into an ECC with AD Skincare, Inc., backed by the Harvest Intrexon Enterprise Fund, sponsored by Harvest Capital Strategies, LLC, which will focus on developing an advanced delivery system for anti-aging active ingredients to be used in cosmetic formulations that are designed to reduce the appearance of certain signs of aging on human facial skin;
Collaborator Fibrocell Science, Inc. (NASDAQ: FCSC) initiated adult patient recruitment in its Phase I/II clinical trial of FCX-007 in June and during July reported the first two adult subjects had been enrolled. Fibrocell expects to commence dosing this year;
Two Intrexon collaborators’ gene therapy programs received Orphan Drug designation from the FDA: Fibrocell’s FCX-013 for the treatment of linear scleroderma and Agilis Biotherapeutics’ AGIL-FA for the treatment of Friedreich’s ataxia;
Exemplar Genetics announced the FDA exercised enforcement discretion in regard to its ExeGen low-density lipoprotein receptor miniswine, clearing this animal that enables superior translational research and better predictive efficacy for commercial use as a research model;
Intrexon’s subsidiary AquaBounty Technologies, Inc. (AIM: ABTU; OTC: AQBT) received approval from Health Canada for commercial sale of AquAdvantage Salmon (AAS) in Canada;
Appointed Geno Germano, a pharmaceutical executive with over 30 years of experience, to the new role of President, helping lead Intrexon’s management team and commercialization efforts;
Appointed Andrew J. Last, Ph.D., a seasoned executive with 30 years of experience spanning life sciences, including biotechnology, genomics, clinical diagnostics, pharmaceuticals and agrochemicals, as Chief Operating Officer, to oversee Intrexon’s multiple technology divisions and operating subsidiaries; and
Appointed distinguished life sciences executive Fred Hassan to Intrexon’s Board of Directors.
Second Quarter Financial Highlights:

Total revenues of $52.5 million, an increase of 17% over the second quarter of 2015;
Net loss of $49.1 million attributable to Intrexon, or $(0.42) per basic share, including non-cash charges of $44.0 million;
Adjusted EBITDA of $110.7 million, or $0.94 per basic share;
Cash consideration received for reimbursement of research and development services covered 59% of cash operating expenses (exclusive of operating expenses of consolidated subsidiaries);
Total consideration received for technology access fees, reimbursement of research and development services and products and services revenues covered 279% of consolidated cash operating expenses; and
Cash, cash equivalents, and short-term and long-term investments totaled $321.2 million, the value of investment in preferred stock totaled $120.0 million, and the value of marketable equity securities totaled $39.0 million at June 30, 2016.
First Half Financial Highlights:

Total revenues of $95.9 million, an increase of 22% over the first half of 2015;
Net loss of $113.5 million attributable to Intrexon, or $(0.97) per basic share, including non-cash charges of $94.6 million;
Adjusted EBITDA of $112.5 million, or $0.96 per basic share;
Cash consideration received for reimbursement of research and development services covered 57% of cash operating expenses (exclusive of operating expenses of consolidated subsidiaries); and
Total consideration received for technology access fees, reimbursement of research and development services and products and services revenues covered 184% of consolidated cash operating expenses.
"We began the year with great anticipation that 2016 will be a period in which we should demonstrate significant progress on several dimensions," commented Randal J. Kirk, Chairman and Chief Executive Officer of Intrexon, "and so far are tracking very well against our objectives. While continuing our trajectory of growing financial performance and capital efficiency, we have advanced many of our programs, achieving key scientific, developmental and regulatory milestones. In addition, our production and marketing plans around three mature yet game-changing assets – the Friendly Aedes mosquito, the Arctic apple and the AquAdvantage salmon – are being managed aggressively, and we look forward to the world enjoying the benefits of each of these unique, sustainable and environmentally responsible solutions to major problems."

Mr. Kirk concluded, "Considering the poignant moment in history that we occupy, one in which there is increasing recognition of the need for the engineering of biology to be responsibly practiced in order to solve an enormous number of world problems in areas such as healthcare, food, energy and the environment, our greatest need in order for Intrexon to play a leading role on this industrial and social vector, is the recruitment and development of great talent at every level of our organization – on our board, within our executive management team and in our labs that today span North America and Europe. In this regard, I am honored every day to work in partnership with our President, Geno Germano, the rest of our executive team and with so many brilliant and dedicated scientists and professionals throughout our organization. I believe that the world should expect great things from such a team, and I believe that they will deliver on these expectations. "

Second Quarter 2016 Financial Results Compared to Prior Year Period
Total revenues were $52.5 million for the quarter ended June 30, 2016 compared to $44.9 million for the quarter ended June 30, 2015, an increase of $7.6 million, or 17%. Collaboration and licensing revenues increased $10.3 million over the quarter ended June 30, 2015 due to (i) the recognition of deferred revenue for upfront payments received from the Company’s license and collaboration agreement with the biopharmaceutical business of Merck KGaA, which became effective in May 2015, and from other collaborations signed by Intrexon between July 1, 2015 and June 30, 2016; and (ii) increased research and development services for these collaborations and for the progression of programs or the addition of new programs with previously existing collaborators. Product revenues were $10.9 million for the quarter ended June 30, 2016 compared to $14.3 million for the quarter ended June 30, 2015, a decrease of $3.4 million, or 24%. The decrease in product revenues and gross margin thereon primarily relates to a decrease in the quantities of pregnant cows, livestock previously used in production and live calves sold due to lower customer demand for these products. The decreases were partially offset by an increase in the quantity of weaned calves sold due to higher customer demand. Service revenues were $13.9 million for the quarter ended June 30, 2016 compared to $13.3 million for the quarter ended June 30, 2015, an increase of $0.6 million, or 5%. The increase relates to an increase in the number of in vitro fertilization cycles performed due to higher customer demand.

Total operating expenses were $75.7 million for the quarter ended June 30, 2016 compared to $62.3 million for the quarter ended June 30, 2015, an increase of $13.4 million, or 22%. Research and development expenses increased $8.0 million, or 39%, due primarily to increases in (i) salaries, benefits and other personnel costs for research and development employees, (ii) lab supplies and consulting expenses, and (iii) depreciation and amortization. Salaries, benefits and other personnel costs increased $2.3 million due to (i) an increase in research and development headcount to support new and expanded collaborations and (ii) costs for research and development employees assumed in the Company’s acquisition of Oxitec Limited, or Oxitec, in September 2015. Lab supplies and consulting expenses increased $3.4 million as a result of (i) the progression into the preclinical phase with certain of Intrexon’s collaborators; (ii) the increased level of research and development services provided to the Company’s collaborators; and (iii) costs incurred as a result of the Company’s September 2015 acquisition of Oxitec. Depreciation and amortization increased $1.9 million primarily as a result of (i) the inclusion of a full quarter of depreciation and amortization on property and equipment and intangible assets acquired in the Company’s 2015 acquisitions, and (ii) amortization related to AquaBounty’s intangible assets upon regulatory approval in November 2015. Selling, general and administrative (SG&A) expenses increased $6.6 million, or 28%, over the second quarter of 2015. Legal and professional expenses increased $5.8 million due to (i) consulting expenses payable in shares of Intrexon’s common stock pursuant to the Company’s services agreement with Third Security, LLC, or Third Security, which the Company entered into in November 2015; (ii) expenses incurred to support domestic and international government affairs for regulatory and other approvals necessary to commercialize the Company’s products and services; (iii) increased legal fees incurred to defend ongoing litigation; and (iv) incremental costs incurred to support the ongoing operations of the Company’s 2015 acquisitions and other business development activities. These increases were partially offset by a decrease of $2.2 million for salaries, benefits and other personnel costs. Salaries, benefits and other personnel costs for SG&A employees decreased primarily due to a decrease in stock compensation and other compensation expenses resulting primarily from the departure of certain officers of the Company. These decreases were partially offset by increased headcount, including a new executive officer to support the Company’s expanding operations as well as the acquisition of Oxitec in September 2015.

First Half 2016 Financial Results Compared to Prior Year Period
Total revenues were $95.9 million for the six months ended June 30, 2016 compared to $78.7 million for the six months ended June 30, 2015, an increase of $17.2 million, or 22%. Collaboration and licensing revenues increased $19.6 million over the six months ended June 30, 2015 due to (i) the recognition of deferred revenue for upfront payments received from the Company’s license and collaboration agreement with the biopharmaceutical business of Merck KGaA, which became effective in May 2015, and from other collaborations signed by Intrexon between July 1, 2015 and June 30, 2016; and (ii) increased research and development services for these collaborations and for the progression of programs or the addition of new programs with previously existing collaborators. Product revenues were $19.4 million for the six months ended June 30, 2016 compared to $23.2 million for the six months ended June 30, 2015, a decrease of $3.8 million, or 16%. The decrease in product revenues and gross margin thereon primarily relates to a decrease in the quantities of pregnant cows, livestock previously used in production and live calves sold due to lower customer demand for these products. The decreases were partially offset by an increase in the quantity of weaned calves sold due to higher customer demand. Service revenues were $24.6 million for the six months ended June 30, 2016 compared to $23.2 million for the six months ended June 30, 2015, an increase of $1.4 million, or 6%. The increase relates to an increase in the number of in vitro fertilization cycles performed due to higher customer demand.

Total operating expenses were $159.7 million for the six months ended June 30, 2016 compared to $183.3 million for the six months ended June 30, 2015, a decrease of $23.6 million, or 13%. Research and development expenses declined $45.5 million, or 46%, due primarily to the inclusion in 2015 of a $59.6 million payment In common stock for an exclusive license to certain technologies owned by the University of Texas MD Anderson Cancer Center. This decrease was partially offset by increases in (i) salaries, benefits and other personnel costs for research and development employees, (ii) lab supplies and consulting expenses, and (iii) depreciation and amortization. Salaries, benefits and other personnel costs increased $4.6 million due to (i) an increase in research and development headcount to support new and expanded collaborations and (ii) costs for research and development employees assumed in the Company’s acquisition of Oxitec in September 2015. Lab supplies and consulting expenses increased $6.2 million as a result of (i) the progression into the preclinical phase with certain of Intrexon’s collaborators; (ii) the increased level of research and development services provided to the Company’s collaborators; and (iii) costs incurred as a result of the Company’s September 2015 acquisition of Oxitec. Depreciation and amortization increased $3.8 million primarily as a result of (i) the inclusion of a full period of depreciation and amortization on property and equipment and intangible assets acquired in the Company’s 2015 acquisitions and (ii) amortization related to AquaBounty’s intangible assets upon regulatory approval in November 2015. SG&A expenses increased $21.8 million, or 43%, over the six months of 2015. Salaries, benefits and other personnel costs for SG&A employees increased $3.8 million due to (i) increased headcount, including a new executive officer, to support the Company’s expanding operations; (ii) a full period of stock compensation expense for a company-wide option grant to employees in March 2015; and (iii) salaries, benefits and other personnel costs for employees assumed in the Company’s acquisition of Oxitec in September 2015. These increases were partially offset by (i) a decrease in stock compensation and other compensation expenses resulting primarily from the departure of certain officers of the Company. Legal and professional expenses increased $9.5 million primarily due to (i) consulting expenses payable in shares of Intrexon’s common stock pursuant to the Company’s services agreement with Third Security which the Company entered into in November 2015; (ii) expenses incurred to support domestic and international government affairs for regulatory and other approvals necessary to commercialize the Company’s products and services; (iii) increased legal fees incurred to defend ongoing litigation; and (iv) incremental costs incurred to support the ongoing operations of the Company’s 2015 acquisitions and other business development activities. In 2016, the Company also recorded $4.2 million in litigation settlement expenses arising from the entrance of a court order in Trans Ova Genetics, L.C.’s trial with XY, LLC.

Total other income (expense), net, was $(43.8 million) for the six months ended June 30, 2016 compared to $94.7 million for the six months ended June 30, 2015, a decrease of $138.5 million, or 146%. This decrease was attributable to the $81.4 million realized gain recognized upon the special stock dividend of all of Intrexon’s shares of ZIOPHARM to the Company’s shareholders in June 2015 and the decrease in fair value of the Company’s equity securities portfolio.