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Sangamo Therapeutics Reports Third Quarter 2017 Financial Results

On November 9, 2017 Sangamo Therapeutics, Inc. (NASDAQ: SGMO) reported its third quarter 2017 financial results and recent accomplishments (Press release, Quigley Pharma, NOV 9, 2017, View Source [SID1234521901]).

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"We continue to make progress on the key priorities we laid out at the beginning of 2017," said Dr. Sandy Macrae, CEO of Sangamo. "Sites are activated in our lead clinical trials and enrollment is commencing, with data expected in the first half of 2018. We believe our optimized zinc finger nuclease technology is setting the standards for genome editing products across the critical dimensions of precision, efficiency and specificity. Our collaborations in hemoglobinopathies and hemophilia A are advancing, and we expect to forge new partnerships for other select programs in the future. With this progress, along with our newly announced manufacturing plans and headquarters, we believe we are laying a strong foundation for the future of Sangamo and look to accelerate our progress into 2018."

Recent Highlights

Treatment of a second patient in the Company’s Phase 1/2 clinical trial evaluating SB-525 gene therapy for hemophilia A, being developed in collaboration with Pfizer Inc.
FDA acceptance of IND application for ST-400, a gene-edited cell therapy candidate for beta-thalassemia. ST-400 is being developed as part of a collaboration with Bioverativ focused on hemoglobinopathies
Presentation of new preclinical data from the company’s cell therapy programs in immuno-oncology and lipid nanoparticle (LNP) delivery platform at the 2017 Annual Congress of the European Society of Gene and Cell Therapy (ESGCT)
Recent data from the Company’s zinc finger nuclease-based cell therapy platform for immuno-oncology demonstrated greater than 90% double knock-out of endogenous TCR and B2M genes and simultaneous targeted integration of a CAR gene construct for the development of potentially best-in-class allogeneic T-cell therapy products
New data from Sangamo’s non-viral LNP delivery platform demonstrated greater than 90% protein knockdown in mice at LNP doses as low as 0.20 mg/kg, with no elevation in liver toxicity
Upcoming Events
Sangamo management will participate in the following upcoming investor conferences:

Jefferies 2017 London Healthcare Conference, London, UK, November 15th at 8:00 a.m. GMT
29th Annual Piper Jaffray Healthcare Conference, New York, NY, November 29th at 8:30 a.m. ET
Barclays Gene Editing & Gene Therapy Summit, New York, NY, November 30th (webcasting services are not provided at this conference).
The presentations on November 15th and 29th will be webcast live and may be accessed via a link on the Sangamo Therapeutics website in the Investors and Media section under Events and Presentations.

Sangamo scientists and collaborators will participate in the following upcoming scientific meetings:

Society for Neuroscience 2017 Annual Meeting, Washington, DC, November 11-15th
59th Annual Meeting of the American Society of Hematology (ASH) (Free ASH Whitepaper), Atlanta, GA, December 9-12th
Webcasting services are not provided at these meetings.

Third Quarter 2017 Financial Results
For the third quarter ended September 30, 2017, Sangamo reported a consolidated net loss of $12.4 million, or $0.15 per share, compared to a net loss of $19.0 million, or $0.27 per share, for the same period in 2016. As of September 30, 2017, the Company had cash, cash equivalents, marketable securities and interest receivable of $253.5 million.

Revenues for the third quarter of 2017 were $11.8 million, compared to $2.8 million for the same period in 2016. Third quarter 2017 revenues were generated primarily from Sangamo’s collaboration agreements with Pfizer, Bioverativ, Shire International (Shire) and Dow Agrosciences, as well as the Company’s research grants. The revenues recognized for the third quarter of 2017 consisted of $11.8 million in collaboration agreements and approximately $0.1 million in research grants, compared to $2.7 million and $0.1 million, respectively, for the same period in 2016.

For the third quarter of 2017, Sangamo recognized $3.0 million of revenues related to research services performed under the collaboration agreement with Bioverativ. Sangamo received upfront payments of $13.0 million, $20.0 million and $70.0 million pursuant to the agreements entered into with Shire in 2012, Biogen (the predecessor of Bioverativ) in 2014, and Pfizer in May 2017, respectively. As of September 30, 2017, the Shire payment has been fully recognized as revenue as all the deliverables were met by Sangamo during the third quarter. Beginning in January 2017, the Biogen agreement was transferred to Bioverativ, and the remaining upfront payment is being recognized as revenue on a straight-line basis through approximately June 2020. The Pfizer upfront payment is being recognized as revenue on a straight-line basis through approximately December 2019. The Company recognized the remaining $1.2 million balance of the Shire upfront payment, $0.4 million of the Bioverativ upfront payment, and $6.6 million of the Pfizer upfront payment as revenues for the third quarter of 2017. In addition, Sangamo recognized $0.4 million in sublicense revenue from Dow Agrosciences for the third quarter of 2017.

Research and development expenses were $18.4 million for the third quarter of 2017, compared to $17.0 million for the same period in 2016. General and administrative expenses were $6.4 million for the third quarter of 2017, compared to $5.0 million for the same period in 2016. Total operating expenses for the third quarter of 2017 were $24.8 million, compared to $22.0 million for the same period in 2016.

Nine Months Results
For the nine months ended September 30, 2017, the consolidated net loss was $41.5 million, or $0.55 per share, compared to a consolidated net loss of $62.0 million, or $0.88 per share, for the nine months ended September 30, 2016. Revenues were $23.5 million for the nine months ended September 30, 2017, compared to $10.5 million for the same period in 2016. The increase in revenues was primarily related to our collaboration and license agreement with Pfizer. Total operating expenses were $66.1 million for the nine months ended September 30, 2017, compared to $73.2 million for the same period in 2016 and reflect decreased expenses related to the completion of external GMP manufacturing expenses associated with the Company’s 2017 clinical studies, and decreased stock-based compensation expenses associated with the transition of the Company’s former chief executive officer.

Financial Guidance for 2017
The company’s financial guidance is based on current expectations. The following statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under "Forward Looking Statements" below.

The Company reiterates guidance as follows:

Revenues: The Company expects that revenues will be in the range of $30 million to $40 million in 2017, inclusive of research funding from existing collaborations.
Operating Expenses: Sangamo expects that operating expenses will be in the range of $90 million to $100 million for 2017, including non-cash stock-based compensation expense.
Cash and Investments: Sangamo expects that its cash, cash equivalents and marketable securities will be at least $220 million at the end of 2017. This anticipated cash balance is inclusive of research funding from existing collaborators but exclusive of funds arising from any additional new collaborations or partnerships or other sources of capital.
Conference Call
Sangamo will host a conference call today, November 9, 2017, at 5:00 p.m. ET, which will be open to the public. The call will also be webcast live and can be accessed via a link on the Sangamo Therapeutics website in the Investors and Media section under Events and Presentations. A replay of the webcast will also be available for one week after the call. During the conference call, the Company will review these results, discuss other business matters and provide guidance with respect to 2017.

The conference call dial-in numbers are (877) 377-7553 for domestic callers and (678) 894-3968 for international callers. The conference ID number for the call is 7886879. For those unable to listen in at the designated time, a conference call replay will be available for one week following the conference call, from approximately 8:00 p.m. ET on November 9, 2017 to 11:59 p.m. ET on November 16, 2017. The conference call replay numbers for domestic and international callers are (855) 859-2056 and (404) 537-3406, respectively. The conference ID number for the replay is 7886879.

Novelion Therapeutics Reports Third Quarter 2017 Financial Results and Announces Leadership Change

On November 9, 2017 Novelion Therapeutics Inc. (NASDAQ: NVLN), a biopharmaceutical company dedicated to developing and commercializing innovative new therapies for individuals living with rare diseases ("Novelion" or the "Company"), reported financial results for the third quarter ended September 30, 2017, announced that it has commenced a search for a new chief executive officer ("CEO") to lead the Company in the next stage of growth, and provided an overview of recent business highlights (Press release, QLT, NOV 9, 2017, View Source [SID1234521900]). Chief Executive Officer Mary Szela has resigned for personal reasons, effective immediately.

To lead the company until a permanent CEO is appointed, the Board announced the creation of an interim Office of the Chief Executive Officer, comprised of Jeffrey Hackman, Novelion’s Chief Operating Officer, Jason Aryeh, Chairman of the Board of Directors and Mark Corrigan, Director. The Board has also formed a search committee, which has commenced efforts to identify candidates who will bring strong strategic and operational direction to the enterprise.

Jason Aryeh said, "Novelion’s strategy and mission will continue to focus on supporting access to our marketed therapies for patients globally and pursuing the development of our product portfolio in order to support long-term and sustainable growth. The board is confident in its ability to identify a successor who will effectively drive improved growth and shareholder value by reinvigorating the Company’s plans in support of our key objectives."

Mr. Aryeh continued, "We recognize the energy that Mary Szela brought to her role as CEO. Much has been accomplished in her tenure, including the merger to create Novelion, and we thank her for her dedication."

Third Quarter 2017 Highlights & Business Update

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JUXTAPID: Novelion reported net revenues of JUXTAPID of $15.2 million in the third quarter of 2017, $10.3 million, or 68%, of which were from prescriptions written in the U.S.

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MYALEPT: Novelion reported net revenues of MYALEPT of $13.5 million in the third quarter of 2017. $11.3 million, or 84%, of these revenues were from prescriptions written in the U.S.

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Novelion reported total net revenues of $28.7 million in the third quarter of 2017.

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The Company is continuing its efforts to stabilize JUXTAPID in the U.S., and continues to make progress with the launch in Japan.

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Novelion ended the third quarter of 2017 with $70.5 million in unrestricted cash, compared with $83.3 million at the end of the second quarter of 2017.

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Novelion’s marketing authorization application for metreleptin was accepted by the European Medicines Agency in January of 2017. In October 2017, the company submitted its responses to the Day 120 Questions, and based on current timelines, continues to anticipate EMA approval in the first half of 2018.

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Novelion appointed Jeffrey Hackman as Executive Vice President and Chief Operating Officer, effective November 1, 2017. Mr. Hackman will lead the company’s commercial efforts, business development, manufacturing and supply chain initiatives. Mr. Hackman was most recently senior vice president, head of the US Internal Medicine and Oncology franchises for Shire. In this role, Mr. Hackman was a member of the US commercial leadership team and was responsible for sales, marketing, business insights and analytics for eight licensed products within Shire’s US rare disease portfolio.

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Novelion appointed Murray Stewart, M.D. as Executive Vice President, Head of R&D, effective November 27, 2017. Dr. Stewart will lead the company’s clinical development activities, provide strategic regulatory guidance for the pipeline and commercial product initiatives, and maintain oversight of global medical affairs, publications and registry activities. Dr. Stewart will join Novelion from GlaxoSmithKline (GSK) where he is currently chief medical officer with global responsibility for patient well-being across the vaccines, pharmaceutical and consumer business units.

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Novelion appointed Suzanne Bruhn, Ph.D. to its board of directors, effective October 1, 2017. Dr. Bruhn is president and chief executive officer of Proclara Biosciences, Inc. Prior to joining Proclara, Dr. Bruhn served as president and chief executive officer of Promedior, Inc. She also served as a member of the board of directors of Raptor Pharmaceuticals from 2011 until it was acquired by Horizon Pharma in 2016. Previously, Dr. Bruhn served as senior vice president, strategic planning and program management at Shire from 1998 until 2012.

2017 Financial Guidance

The Company reiterated its previously stated net revenues financial guidance for full year 2017 and expects:

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Total net revenues between $135 million and $145 million;
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JUXTAPID net revenues between $70 million and $75 million; and
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MYALEPT net revenues between $65 million and $70 million.

Third Quarter 2017 Financial Results

On November 29, 2016, the Company completed its acquisition of Aegerion Pharmaceuticals, Inc. ("Aegerion"). The acquisition has been accounted for as a business combination in which Novelion was considered the acquirer of Aegerion. As such, under U.S. Generally Accepted Accounting Principles ("GAAP"), the financial statements of Novelion are treated as the historical financial

statements of the consolidated companies, with the results of Aegerion being included from November 29, 2016. This release also includes pro forma adjusted non-GAAP financial information showing pro forma results of operations of Novelion as if the acquisition had occurred on January 1, 2016. Reconciliation of the financial results on a GAAP versus non-GAAP basis are provided below the financial information that follows.

GAAP total net revenues for the third quarter of 2017 were $28.7 million compared to the prior year’s third quarter net revenues of $0. GAAP net revenues for JUXTAPID in the third quarter of 2017 were $15.2 million compared to $0 in the prior year. GAAP net revenues for MYALEPT in the third quarter of 2017 were $13.5 million compared to $0 for the same period in 2016.

GAAP total operating expenses for the third quarter of 2017 were $38.6 million compared to total operating expenses of $6.0 million for the same period in 2016. GAAP SG&A expenses were $21.4 million in the third quarter of 2017 compared to $3.2 million for the same period in 2016. GAAP R&D expenses were $17.1 million in the third quarter of 2017 compared to $2.9 million for the same period in 2016.

On a pro forma basis, during the third quarter of 2017, SG&A expenses were $20.2 million compared to $28.2 million for the same period in 2016. The decrease in pro forma SG&A expenses in the third quarter of 2017 compared with the same period in 2016 was primarily related to a reduction in headcount and legal and consulting fees.

On a pro forma basis, during the third quarter of 2017, R&D expenses were $16.9 million compared to $12.7 million for the same period in 2016. The decrease in R&D expenses in the third quarter of 2017 compared with the same period in 2016 was primarily related to a reduction in headcount.

GAAP net loss in the third quarter of 2017 was $49.7 million compared to GAAP net loss of $5.9 million during the same period in 2016.

On a pro forma basis, net loss in the third quarter of 2017 was $16.6 million, compared to $14.3 million for the same period in 2016.

As part of the Merger between QLT and Aegerion, the Company acquired inventory, a portion of which is classified as non-current based on its forecasted consumption exceeding one year. An excess and obsolescence analysis is run to determine the need to adjust inventory carrying values. In the third quarter, that analysis led to a write down of inventory of approximately $17.3 million.

First Nine Months of 2017 Financial Results

GAAP total net revenues for the first nine months of 2017 were $99.5 million compared to $0 for the same period of 2016. GAAP net revenues for JUXTAPID for the first nine months of 2017 were $51.9 million compared to $0 in same period in 2016. GAAP net revenues for MYALEPT for the first nine months of 2017 were $47.6 million compared to $0 for the same period in 2016.

GAAP total operating expenses for the first nine months of 2017 were $112.1 million compared to total operating expenses of $22.3 million for the same period in 2016. GAAP SG&A expenses were $72.4 million in the first nine months of 2017 compared to $13.6 million for the same period in 2016.

GAAP R&D expenses were $37.2 million in the first nine months of 2017 compared to $8.8 million for the same period in 2016.

On a pro forma basis, for the first nine months of 2017, SG&A expenses were $68.2 million compared to $111.5 million for the same period in 2016. For the first nine months of 2017, R&D expenses on a pro forma basis were $36.6 million compared to $37.9 million for the same period in 2016.

GAAP net loss for the first nine months of 2017 was $102.1 million compared to GAAP net loss of $33.0 million during the same period in 2016.

On a pro forma basis, net loss for the first nine months of 2017 was $26.7 million, compared to $111.7 million for the same period in 2016.

As of September 30, 2017, the Company’s consolidated unrestricted cash balance was $70.5 million, compared to $83.3 million at June 30, 2017 and $108.9 million at December 31, 2016. As of September 30, 2017, there were 18.6 million shares outstanding. At September 30, 2017, total debt was $325 million, reflecting the principal amount of convertible debt issued by Aegerion and consolidated as a result of the acquisition.

Puma Biotechnology Reports Third Quarter 2017 Financial Results

On November 9, 2017 Puma Biotechnology, Inc. (NASDAQ: PBYI), a biopharmaceutical company, reported financial results for the third quarter and nine months ended September 30, 2017 (Press release, Puma Biotechnology, NOV 9, 2017, View Source [SID1234521899]). Unless otherwise stated, all comparisons are for the third quarter and nine months of 2017 compared to the third quarter and nine months of 2016.

On July 17, 2017, Puma Biotechnology received approval from the U.S. Food and Drug Administration (FDA) for NERLYNX (neratinib) for the treatment of early stage HER2-positive breast cancer following adjuvant trastuzumab-based therapy, and began shipments to wholesalers at the end of July 2017. In the third quarter of 2017, the Company reported net revenue from initial sales of NERLYNX of approximately $6.1 million.

Based on accounting principles generally accepted in the United States (GAAP), Puma reported a net loss applicable to common stock of $77.2 million, or $2.07 per share, for the third quarter of 2017, compared to a net loss applicable to common stock of $65.8 million, or $2.02 per share, for the third quarter of 2016. Net loss applicable to common stock for the first nine months of 2017 was $227.9 million, or $6.15 per share, compared to $203.4 million, or $6.26 per share, for the first nine months of 2016.

Non-GAAP adjusted net loss was $50.7 million, or $1.36 per share, for the third quarter of 2017, compared to non-GAAP adjusted net loss of $36.0 million, or $1.11 per share, for the third quarter of 2016. Non-GAAP adjusted net loss for the nine months ended September 30, 2017 was $144.7 million, or $3.90 per share, compared to non-GAAP adjusted net loss of $115.4 million, or $3.55 per share, for the nine months ended September 30, 2016. Non-GAAP adjusted net loss excludes stock-based compensation expense, which represents a significant portion of overall expense and has no impact on the cash position of the Company. For a reconciliation of GAAP net loss to non-GAAP adjusted net loss and GAAP net loss per share to non-GAAP adjusted net loss per share, please see the financial tables at the end of this news release.

Net cash used in operating activities for the third quarter of 2017 was $54.9 million. Net cash used in operating activities for the nine months ended September 30, 2017 was $136.9 million. At September 30, 2017, Puma had cash and cash equivalents of $79.7 million and marketable securities of $26.6 million, compared to cash and cash equivalents of $194.5 million and marketable securities of $35.0 million at December 31, 2016.

Effective October 31, 2017, Puma entered into a credit facility with Silicon Valley Bank and Oxford Finance for a term loan of up to $100 million, subject to funding in two tranches. The Company received gross proceeds of $50 million from the first tranche of the credit facility upon closing on October 31, 2017 and intends to use the funds for general corporate purposes and to further support NERLYNX commercial initiatives. The second tranche of $50 million may be drawn at the Company’s option and is subject to the achievement of certain milestones. The loan will mature on October 31, 2022.

"With the U.S. approval and launch of NERLYNX in the third quarter, we began providing early stage HER2-positive breast cancer patients with an additional option to reduce their risk of disease recurrence," said Puma Chief Executive Officer and President Alan H. Auerbach. "We are pleased with the feedback that we have received from patients, prescribers and payors during the initial launch and we look forward to continuing to execute our commercial activities throughout 2017 and beyond.

"Looking forward, we anticipate the following milestones: (i) reporting additional data from the Phase II CONTROL trial in the fourth quarter of 2017; (ii) receiving a regulatory opinion from the Committee for Medicinal Products for Human Use (CHMP) for neratinib in extended adjuvant HER2-positive early stage breast cancer in the first quarter of 2018; and (iii) reporting Phase III trial results in third-line HER2- positive metastatic breast cancer patients in the first half of 2018."

Product Revenue

Net revenue consists of sales of NERLYNX, Puma’s first and only commercial product to date. The FDA approved NERLYNX in July 2017 and the Company commenced shipment to wholesalers in late July. For the three and nine months ended September 30, 2017, net revenue was approximately $6.1 million.

Operating Expenses

Operating expenses were $83.5 million for the third quarter of 2017, compared to $66.0 million for the third quarter of 2016. Operating expenses for the nine months ended September 30, 2017 were $234.9 million, compared to $203.7 million for the nine months ended September 30, 2016.

Cost of Sales:

Cost of sales was $1.5 million for the third quarter and nine months ended September 30, 2017. The Company had no product sales prior to the third quarter of 2017.

Selling, General and Administrative Expenses:

Selling, general and administrative (SG&A) expenses were $32.5 million for the third quarter of 2017, compared to $14.0 million for the third quarter of 2016. SG&A expenses for the nine months ended September 30, 2017 were $75.8 million, compared to $37.3 million for the nine months ended September 30, 2016. The $38.5 million increase during the first nine months of 2017, compared to the first nine months of 2016, resulted primarily from increases of approximately $24.2 million for professional fees and expenses, $8.2 million in payroll and related costs, $3.2 million for stock-based compensation, $2.4 million for other expenses such as travel and related costs to support the commercial launch of NERLYNX, and $0.4 million for facility and equipment costs. These increases reflect overall corporate growth.

Research and Development Expenses:

Research and development (R&D) expenses were $49.5 million for the third quarter of 2017, compared to $52.0 million for the third quarter of 2016. R&D expenses for the nine months ended September 30, 2017 were $157.6 million, compared to $166.4 million for the nine months ended September 30, 2016. The approximately $8.8 million decrease during the first nine months of 2017, compared to the first nine months of 2016, resulted primarily from decreases of approximately $5.0 million due to a decrease in regulatory submission activity, decreased preclinical study activities and decreased drug supply manufacturing logistics, and $8.0 million for stock-based compensation, partially offset by increases during the first nine months of 2017, compared to the first nine months of 2016, of approximately $2.2 million for internal clinical development, internal regulatory affairs and quality assurance and internal chemical manufacturing, and $2.0 million for consultants and contractors.

Conference Call

Puma Biotechnology will host a conference call to report its third quarter financial results and provide an update on the company’s business and outlook at 1:30 p.m. PST/4:30 p.m. EST on Thursday, November 9, 2017. The call may be accessed by dialing 1-877-709-8150 (domestic) or 1-201-689-8354 (international) at least 10 minutes prior to the start of the call and referencing the "Puma Biotechnology Conference Call." A live webcast of the conference call and presentation slides may be accessed on the Investors section of the Puma Biotechnology website at View Source A replay of the call will be available approximately one hour after completion of the call and will be archived on the company’s website for 90 days.

PROMETIC TO REPORT ITS THIRD QUARTER 2017 FINANCIAL RESULTS AND TO HOLD CONFERENCE CALL / WEBCAST

On November 9, 2017 Prometic Life Sciences Inc. (TSX: PLI) (OTCQX: PFSCF) ("Prometic") reported that it will report its financial results for the third quarter ended September 30, 2017 on Monday November 13, 2017 after market close (Press release, ProMetic Life Sciences, NOV 9, 2017, View Source [SID1234521898]).

Prometic will host a conference call at 11:00am (ET) on Tuesday November 14, 2017. The telephone numbers to access the conference call are 1-888-231-8191 and 647-427-7450. A live audio webcast of the conference call will be available via: View Source;s=1&k=99570B881A8129DE3DCA8DE3EBD93544

An audio replay of the call will be available as of Tuesday November 14, 2017 at 2:00pm (ET). The numbers to access the audio replay are 416-849-0833 and 1-855-859-2056 using the following password (3866799).

Pfenex Reports Third Quarter 2017 Results, Interim PK data from PF708 Study, Completion of Process Development Milestone on Jazz Program and Provides Business Update

On November 9, 2017 Pfenex Inc. (NYSE American: PFNX) a clinical-stage biotechnology company developing complex therapeutic proteins, using the patented Pfenex Expression Technology platform, reported that it has created an advanced pipeline of therapeutic equivalents, vaccines, biologics and biosimilars (Press release, Pfenex, NOV 9, 2017, View Source2017-11-09-Pfenex-Reports-Third-Quarter-2017-Results-Interim-PK-data-from-PF708-Study-Completion-of-Process-Development-Milestone-on-Jazz-Program-and-Provides-Business-Update" target="_blank" title="View Source2017-11-09-Pfenex-Reports-Third-Quarter-2017-Results-Interim-PK-data-from-PF708-Study-Completion-of-Process-Development-Milestone-on-Jazz-Program-and-Provides-Business-Update" rel="nofollow">View Source [SID1234521895]). The company reported financial results for the third quarter ended September 30, 2017 and provided a business update.

Business Review and Update

Today, Pfenex is pleased to announce the interim pharmacokinetic (PK) results from ongoing Study PF708-301, which compares the effects of PF708 and Forteo in osteoporosis patients. PF708 is a teriparatide product candidate that is being developed through the 505(b)(2) regulatory pathway in the US and references Forteo, marketed by Eli Lilly for the treatment of osteoporosis patients at a high risk of fracture, as the Reference Listed Drug. Study PF708-301 completed enrollment in the third quarter of 2017 with a total of 181 patients – 90 randomized to PF708 and 91 to Forteo. The primary study endpoint is anti-drug antibody formation after 24 weeks of drug treatment. The secondary study endpoints are changes in bone mineral density and bone turnover markers after 24 weeks of drug treatment, as well as PK parameters for up to 4 hours after the first dose.

The interim PK data from the study are shown in Figure 1. The PF708 and Forteo PK profiles are comparable, and there are no statistically significant differences in key PK parameters. The study is on-track for completion and top-line immunogenicity data readout in the first half of 2018. Pfenex believes that results from Study PF708-301, along with the previously-announced bioequivalence findings from Study PF708-101 in healthy subjects, should satisfy the clinical filing requirements for PF708 and expects to submit the new drug application (NDA) to the FDA in the third quarter of 2018. Pfenex believes it has sufficient cash resources to fund all necessary activities leading up to and including the submission of the NDA to the FDA.

Pfenex has completed a strategic review of PF582 and PF529, biosimilar product candidates to Lucentis and Neulasta, respectively. The strategic review considered timeline for development and cost. While the market opportunities remain attractive, Pfenex has decided to pause development activities on PF582 and PF529 and focus development efforts elsewhere within the product portfolio until strategic partnerships for these candidates are forged. The company continues to engage with potential strategic partners to monetize the assets.

Px563L and RPA563, novel anthrax vaccine candidates, are being developed by Pfenex in response to the United States government’s unmet demand for increased quantity, stability and dose-sparing regimens of anthrax vaccine. The development of our anthrax candidates is funded by the U.S. Department of Health and Human Services, through the Biomedical Advanced Research and Development Authority, or BARDA, in accordance with a cost plus fixed fee advanced development contract valued at up to approximately $143.5 million. Recently, Pfenex completed a meeting with the FDA, in which the Agency provided clear guidance for the proposed clinical development and licensure plans for post-exposure prophylaxis indication. Ahead of the phase 2 study initiation, Pfenex expects to continue to demonstrate stability of the vaccine candidates and complete manufacturing of the clinical supply. Pfenex expects to initiate the phase 2 study by year-end 2018.

Pfenex is pleased to announce that during the third quarter, it completed a process development milestone associated with its collaboration with Jazz Pharmaceuticals. In July 2016, Pfenex and Jazz announced an agreement under which Pfenex granted Jazz worldwide rights to develop and commercialize multiple early stage hematology product candidates. Under the agreement, Pfenex received upfront and option payments totaling $15 million and may be eligible to receive additional payments of up to $166 million based on the achievement of certain development-, regulatory-, and sales-related milestones.

Figure 1. Study PF708-301: Interim PK Results

Financial Highlights for the Third Quarter 2017

Total Revenue decreased to $5.0 million in the three-month period ended September 30, 2017 compared to $48.8 million in same period in 2016. This decrease in revenue was due to the termination of our development and license agreement with Pfizer in the third quarter of 2016 which resulted in accelerated recognition of $45.8 million of revenue. This decrease was partially offset by a $2.0 million increase in revenue comprised of revenue recognized in connection with meeting a process development milestone under our collaboration agreement with Jazz and increased government contract revenue for our Px563L/RPA563 product candidate, as greater activity occurred from two options exercised in January 2017 under our existing contract with the U.S. government allowing for continued development. Given the nature of the development process, revenue will fluctuate depending on stage of development.

Cost of revenue increased to $1.8 million in the three-month period ended September 30, 2017 compared to $1.3 million in same period in 2016. This increase in cost of revenue was mainly due to an increase in costs for our Px563L/RPA563 product candidate under our government contracts related to the two options exercised in January 2017. Given the nature of the development process, these costs will fluctuate depending on stage of development.

Research and development expenses decreased to $8.1 million in the three-month period ended September 30, 2017 compared to $8.7 million in same period in 2016. This decrease in research and development expenses was primarily due to the stage of development of our pipeline programs. Expenses decreased for materials and subcontractors for PF529 and PF530, which were partially offset due to clinical trial expenses for PF708.

Selling, general and administration expenses decreased to $4.0 million in the three-month period ended September 30, 2017 compared to $4.4 million in same period in 2016.

Cash and cash equivalents as of September 30, 2017 was $48.4 million.

Cautionary Note Regarding Forward-Looking Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Pfenex’s future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern Pfenex’s expectations, strategy, plans or intentions. Forward-looking statements in this press release include, but are not limited to, statements regarding the future potential of Pfenex’s product candidates, including future plans to advance, develop, manufacture and commercialize its product candidates; Pfenex’s expectation to receive data from the PF708 clinical program in the first half of 2018 and its expectation to submit an NDA in the third quarter of 2018; Pfenex’s expectations with respect to the sufficiency of its cash resources; Pfenex’s expectations regarding the timing of the release of additional clinical trial data for its product candidates; Pfenex’s expectations regarding the timing and advancement of clinical trials and the types of future clinical trials for its product candidates, including PF708 and Px563L/RPA563; Pfenex’s expectations regarding the expected regulatory pathways for its product candidates, including the development of PF708 pursuant to the 505(b)(2) regulatory pathway; Pfenex’s expectations regarding the sufficiency of its clinical trials to satisfy regulatory requirements; Pfenex’s expectation for potential partnership opportunities for its product candidates; Pfenex’s expectation that it will continue to demonstrate stability of Px563L/RPA563 and complete manufacturing of the clinical supply; Pfenex’s expectation that it will initiate a phase 2 study for Px563L/RPA563 by year-end 2018; and Pfenex’s expectations with respect to the timing of future regulatory filings for its product candidates. Pfenex’s expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Actual results may differ materially from those indicated by these forward-looking statements as a result of the uncertainties inherent in the clinical drug development process, including, without limitation, Pfenex’s ability to successfully demonstrate the efficacy and safety of its product candidates; the pre-clinical and clinical results for its product candidates, which may not support further development of product candidates or may require Pfenex to conduct additional clinical trials or modify ongoing clinical trials or regulatory pathways; challenges related to commencement, patient enrollment, completion, and analysis of clinical trials; difficulties in achieving and demonstrating biosimilarity in formulations; Pfenex’s ability to manage operating expenses; Pfenex’s ability to obtain additional funding to support its business activities and establish and maintain strategic business alliances and new business initiatives; Pfenex’s dependence on third parties for development, manufacture, marketing, sales and distribution of products; unexpected expenditures; and difficulties in obtaining and maintaining intellectual property protection for its product candidates. Information on these and additional risks, uncertainties, and other information affecting Pfenex’s business and operating results is contained in Pfenex’s Annual Report on Form 10-K for the period ended December 31, 2016 and in its other filings with the Securities and Exchange Commission. Additional information will also be set forth in Pfenex’s Quarterly Report on Form 10-Q for the period ended September 30, 2017 to be filed with the Securities and Exchange Commission. The forward-looking statements in this press release are based on information available to Pfenex as of the date hereof, and Pfenex disclaims any obligation to update any forward-looking statements, except as required by law.

Pfenex investors and others should note that we announce material information to the public about the Company through a variety of means, including our website (View Source), our investor relations website (View Source), press releases, SEC filings, public conference calls, corporate Twitter account (View Source), Facebook page (View Source), and LinkedIn page (View Source) in order to achieve broad, non-exclusionary distribution of information to the public and to comply with our disclosure obligations under Regulation FD. We encourage our investors and others to monitor and review the information we make public in these locations as such information could be deemed to be material information. Please note that this list may be updated from time to time.