PFIZER REPORTS SECOND-QUARTER 2015 RESULTS

On July 28, 2015 Pfizer Inc. (NYSE: PFE) reported financial results for secondquarter 2015 and announced increases to the midpoints of its 2015 financial guidance(3) ranges for reported revenues(1) and reported(1) and adjusted(2) diluted EPS (Press release, Pfizer, JUL 28, 2015, View Source [SID:1234506718]).

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The company manages its commercial operations through two distinct businesses: an Innovative Products business and an Established Products business. The Innovative Products business is composed of two operating segments: the Global Innovative Pharmaceutical segment (GIP)(4) and the Global Vaccines, Oncology and Consumer Healthcare segment (VOC)(4) . The Established Products business consists of the Global Established Pharmaceutical segment (GEP)(4). Financial results for each of these segments are presented in the Operating Segment Information section.

EXECUTIVE COMMENTARY

Ian Read, Chairman and Chief Executive Officer, stated, "Our second-quarter and year-to-date financial performance is the result of continued business momentum, driven by solid execution of recent product launches in our Innovative Products business, notably Ibrance and Prevnar 13 in adults in the U.S., along with continued growth from Eliquis and Xeljanz, increased focus on and support of growth initiatives within our Established Products business as well as shareholder-friendly capital allocation. For the remainder of 2015, we look forward to completing the pending acquisition of Hospira, Inc. (Hospira), which we expect will meaningfully enhance our Established Products business, particularly in sterile injectables and biosimilars, and continuing to advance our late-stage pipeline in important areas such as oncology and immuno-oncology, vaccines, rare disease, cardiovascular disease and biosimilars. I continue to see both of our businesses as highly focused, well managed and competitively positioned in their key markets."

Frank D’Amelio, Chief Financial Officer, stated, "Overall, I am very pleased with our second-quarter 2015 financial results. We were able to grow revenues by 1% excluding the impact of foreign exchange, marking the third consecutive quarter of operational revenue growth, despite the continued significant negative impact from product losses of exclusivity, primarily Celebrex and Zyvox in the U.S. and Lyrica in certain developed Europe markets.

"As a result of our strong operational performance to date coupled with an improved operational outlook for the remainder of the year, we are raising the midpoint of our 2015 financial guidance(3) range for reported revenues(1) by $500 million and the midpoint of our guidance range for adjusted diluted EPS(2) by $0.04. Changes in foreign exchange rates since mid-April 2015 did not materially impact our latest guidance," Mr. D’Amelio concluded.

QUARTERLY FINANCIAL HIGHLIGHTS (Second-Quarter 2015 vs. Second-Quarter 2014)

Reported revenues(1) decreased $920 million, or 7%, which reflects operational growth of $125 million, or 1%, more than offset by the unfavorable impact of foreign exchange of $1.0 billion, or 8%. Excluding the impact of foreign exchange, adjusted diluted EPS(2) increased by approximately 6%.

Operational revenue growth in developed markets was driven by the performance of several key products, including Prevnar 13 in adults, Eliquis, Ibrance and Xeljanz — all products that are early in their life cycles — as well as from vaccines acquired last year from Baxter International Inc. (Baxter). In emerging markets, revenues increased 6% operationally, reflecting continued strong operational growth, primarily from Lipitor and Prevenar 13.

Operational revenue growth was partially offset primarily by the loss of exclusivity and immediate multi-source generic competition for Celebrex in the U.S. as well as Zyvox in the U.S. and Lyrica in certain developed Europe markets.

Innovative Products Business Highlights

Revenues for the Innovative Products business increased 17% operationally, reflecting the following:

GIP(3) revenues increased 8% operationally, primarily due to strong operational performance of recently launched products, including Eliquis globally and Xeljanz in the U.S., in addition to the continued strong performances of Lyrica in the U.S. and Japan and Viagra in the U.S. Operational growth was partially offset by generic competition for Rapamune in the U.S., which began in October 2014, and by increased competition for BeneFIX in the U.S.

VOC(3) revenues increased 29% operationally, reflecting the following:

– Global Vaccines(3) revenues increased 52% operationally. Prevnar 13 revenue in the U.S. increased 87%, primarily driven by continued strong uptake among adults. International revenues increased 25% operationally, driven by Prevenar 13, which grew 10% operationally, primarily reflecting increased shipments associated with Gavi, the Vaccine Alliance, the favorable impact of Prevenar’s inclusion in additional national immunization programs in certain emerging markets compared with the year-ago quarter, as well as the inclusion in second-quarter 2015 of revenues associated with the acquisition of Baxter’s portfolio of marketed vaccines in Europe.

– Consumer Healthcare(3) revenues decreased 2% operationally, primarily due to the non-recurrence of initial retailer stocking associated with the launch of Nexium 24HR in the U.S. in the prior-year quarter. Excluding Nexium 24HR, the Consumer Healthcare business in the U.S. increased 5%, driven by increased promotional support for key brands. Additionally, revenues from emerging markets increased 11% operationally, primarily driven by China and Venezuela.

– Global Oncology(3) revenues increased 36% operationally, primarily driven by strong momentum following the February 2015 U.S. launch of Ibrance for advanced breast cancer and, to a lesser extent, stronger demand for Sutent, Inlyta and Xalkori in most markets.

Established Products Business Highlights

GEP(3) revenues decreased 14% operationally, primarily due to the loss of exclusivity and immediate launch of multi-source generic competition for Celebrex in the U.S. in December 2014 as well as generic competition for Zyvox in the U.S. beginning in first-half 2015 and for Lyrica in certain developed Europe markets beginning in first-quarter 2015. Revenues for Lipitor in developed markets declined as a result of continued generic competition. Additionally, the co-promotion collaboration for Spiriva has terminated in most countries, including in the U.S. in April 2014. These declines were partially offset by growth in emerging markets, where revenues increased 2% operationally, primarily driven by Lipitor.

Income Statement Highlights

Adjusted cost of sales, adjusted SI&A expenses and adjusted R&D expenses(2) in the aggregate increased $225 million operationally, or 3%, reflecting the following operational factors: – higher adjusted cost of sales(2), primarily reflecting an increase in sales volume partially offset by a decrease in royalty expense;

– higher adjusted SI&A expense(2), primarily reflecting increased investments to support recently launched products and other in-line products, largely offset by continued benefits from cost-reduction and productivity initiatives; and

– higher adjusted R&D expense(2), primarily due to incremental investment in the late-stage pipeline, primarily bococizumab, partially offset by lower clinical trial spend for Trumenba, Prevnar 13 adult, and certain oncology products, as well as the completion of postmarketing commitments for certain in-line products.

The effective tax rate on adjusted income(2) declined 2.3 percentage points to 25.6% from 27.9%. This decline was primarily due to a favorable change in the jurisdictional mix of earnings partially offset by a decline in tax benefits associated with the resolution of certain tax positions pertaining to prior years, with various foreign tax authorities.

The diluted weighted-average shares outstanding declined by 201 million shares compared to the prioryear quarter due to Pfizer’s share repurchase program, including the impact of the $5 billion accelerated share repurchase agreement executed in February 2015 and completed in July 2015.
In addition to the aforementioned factors, second-quarter 2015 reported earnings were primarily impacted by the following:

Unfavorable impacts:
– higher legal charges and acquisition-related costs associated with the pending acquisition of Hospira in second-quarter 2015 compared to the prior-year quarter; and

– higher charges incurred in second-quarter 2015 for business and legal entity alignment activities.

Favorable impacts:
– lower restructuring and other charges associated with cost-reduction and productivity initiatives and lower purchase accounting adjustments in second-quarter 2015 compared to the prior-year quarter; and

– a lower effective tax rate, primarily due to a favorable change in the jurisdictional mix of earnings partially offset by a decline in tax benefits associated with the resolution of certain tax positions pertaining to prior years, with various foreign tax authorities.

RECENT NOTABLE DEVELOPMENTS

Product Developments

Ibrance (palbociclib) — Pfizer announced in May 2015 study results demonstrating palbociclib in combination with fulvestrant was superior to treatment with a standard of care, fulvestrant, by significantly extending progression-free survival (PFS) in women with hormone receptor-positive, human epidermal growth factor receptor 2-negative (HER2-) metastatic breast cancer whose disease has progressed during or after endocrine therapy (Hazard Ratio: 0.42, median PFS: 9.2 vs. 3.8 months, in their respective arms, p<0.000001). Results from the Phase 3 PALOMA-3 study were presented as a late-breaker at the 51st Annual Meeting of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) in June 2015. The PALOMA-3 study met its primary endpoint of PFS at the interim analysis and was stopped early in April 2015 due to efficacy based on an assessment by an independent Data Monitoring Committee. Benefit from palbociclib was demonstrated across all pre-specified subgroups, including both pre/perimenopausal and postmenopausal patients. At the time of the PFS analysis, overall survival (OS) data were immature. The adverse events observed with palbociclib in combination with fulvestrant in PALOMA-3 were consistent with their respective labeled adverse event profiles. Pfizer plans to submit a supplemental New Drug Application to the U.S. Food and Drug Administration (FDA) in fourth-quarter 2015 for potential inclusion of data from the PALOMA-3 study in the U.S. label. Additionally, Pfizer intends to file a Marketing Authorisation Application for palbociclib with the European Medicines Agency (EMA) in third-quarter 2015. The planned EMA submission will include data from the PALOMA-1 study, which evaluated palbociclib plus letrozole in women with estrogen receptor positive, HER2- locally advanced or newly diagnosed metastatic breast cancer, as well as data from the PALOMA-3 study.

Trumenba — Pfizer announced in June 2015 that the U.S. Centers for Disease Control and Prevention’s (CDC) Advisory Committee on Immunization Practices (ACIP) voted to recommend that decisions to vaccinate adolescents and young adults 16 through 23 years of age against serogroup B meningococcal (MenB) disease should be made at the individual level with healthcare providers. Specifically, the ACIP – 7 – voted that a MenB vaccine series may be administered to adolescents and young adults 16 through 23 years of age to provide short-term protection against most strains of MenB disease. The preferred age for MenB vaccination is 16 through 18 years of age. This recommendation expands the CDC’s ACIP February 2015 recommendation for MenB vaccination.

Xeljanz (tofacitinib)

– Pfizer presented in June 2015 more than 20 abstracts at the European League Against Rheumatism Annual Congress (EULAR), including over six years of safety and efficacy data from two long-term extension studies, real-world experience analyses, and clinical, patient-reported and radiographic efficacy outcomes with Xeljanz monotherapy, as well as health economics outcomes research that include patient-preference data for Xeljanz in patients with rheumatoid arthritis (RA). Additionally, results from the Xeljanz 11 mg once daily clinical pharmacology program were presented during the Congress, demonstrating equivalence in key pharmacokinetic parameters to Xeljanz 5 mg twice daily.

– Pfizer presented in June 2015 twelve presentations, including new data on tofacitinib for chronic plaque psoriasis and atopic dermatitis, at the 23rd World Congress of Dermatology meeting. Among the highlights were three late-breaking presentations, including 52-week pooled results from the Oral treatment Psoriasis Trials (OPT) pivotal studies, an integrated safety summary across the OPT development program for oral tofacitinib, and the first presentation of two-year results from OPT Extend, the ongoing long-term extension study of tofacitinib in moderate to severe chronic plaque psoriasis.

– Pfizer announced in July 2015 that the FDA accepted for review Pfizer’s new drug application for Xeljanz 11 mg once daily modified release tablets for the treatment of moderate to severe RA in patients who have had an inadequate response or intolerance to methotrexate. The FDA has provided an anticipated Prescription Drug User Fee Act (PDUFA) action date in February 2016.

Xalkori — Pfizer announced in April 2015 that Xalkori (crizotinib) received Breakthrough Therapy designation by the FDA for the potential treatment of patients with ROS1-positive non-small cell lung cancer (NSCLC). Occurring in approximately one percent of NSCLC cases, ROS1-positive NSCLC represents a particular molecular subgroup of NSCLC. Xalkori currently is approved in the U.S. for the treatment of patients with metastatic NSCLC whose tumors are anaplastic lymphoma kinase (ALK)- positive as detected by a FDA-approved test. Pfizer will work closely with the FDA on the development of Xalkori for ROS1-positive NSCLC and provide the information needed to support a potential regulatory submission.

Pipeline Developments

A comprehensive update of Pfizer’s development pipeline was published today and is now available at www.pfizer.com/pipeline. It includes an overview of Pfizer’s research and a list of compounds in development with targeted indication and phase of development, as well as mechanism of action for candidates from Phase 2 through registration.

At ASCO (Free ASCO Whitepaper) 2015, Pfizer Oncology presented data showcasing the clinical progress of several marketed products and investigational compounds spanning multiple tumor types, including breast cancer, NSCLC and non-Hodgkin’s lymphoma (NHL). Pfizer abstracts included data for two investigational agents, highlighting the depth of Pfizer’s immunotherapy pipeline and heritage in lung cancer and personalized medicine: PF-05082566, a fully humanized monoclonal antibody that stimulates signaling through 4-1BB in patients with CD20+ NHL and the first ever clinical data for PF-06463922, a novel adenosine triphosphate competitive small molecule inhibitor of ALK/ROS1, in patients with advanced ALK+ or ROS1+ NSCLC. Pfizer also presented new analyses from the pivotal Phase 2 PALOMA-1 trial for Ibrance (palbociclib), providing additional data on patient subgroups of interest. The Merck KGaA-Pfizer Alliance also presented 10 abstracts on avelumab, providing the latest preliminary clinical results across various tumor types, including NSCLC and ovarian cancer.

PF-06290510 (Staphylococcus aureus (S. aureus) vaccine candidate) — In July 2015, Pfizer announced enrollment of the first patient in a Phase 2b clinical trial of its investigational S. aureus multi-antigen vaccine in adults undergoing elective spinal fusion surgery. The purpose of the study, named STRIVE (STaphylococcus aureus SuRgical Inpatient Vaccine Efficacy), is to evaluate the safety and efficacy of the vaccine to determine if it prevents postoperative invasive S. aureus infections in patients undergoing elective spinal surgery. The trial is expected to enroll approximately 2,600 patients with final results expected in 2017. PF-06290510 was granted Fast Track designation by the FDA in February 2014.

PF-06425090 (Clostridium difficile (C. difficile) vaccine candidate) — In November 2014, Pfizer disclosed that in a previous Phase 2 study, enrollment and vaccination of further subjects was halted due to several observed cases of severe local reactogenicity (redness). Pfizer has since identified a new path forward using an alternate formulation. In July 2015, Pfizer initiated a new Phase 2 study to evaluate the safety, tolerability and immunogenicity of its investigational C. difficile vaccine in healthy adults 65 to 85 years of age. The trial is expected to enroll approximately 850 patients with final results expected in 2017. PF-06425090 was granted Fast Track designation by the FDA in August 2014.

Lipitor Over-the-Counter (OTC) — A Phase 3 "actual use" trial intended to simulate the OTC use of Lipitor (atorvastatin calcium) 10 mg was completed in December 2014. The study did not meet its primary objectives of demonstrating patient compliance with the direction to check their low-density lipoprotein cholesterol (LDL-C) level and, after checking their LDL-C level, take appropriate action based on their test results. Based on dialogue with the FDA about the program and analysis of this data, the program was terminated.

PF-06410293 — In July 2015, Pfizer began dosing patients in a multinational Phase 3 clinical trial of PF-06410293, a potential biosimilar to Humira(6) (adalimumab). The Phase 3 clinical trial will evaluate the efficacy, safety, and immunogenicity of PF-06410293 plus methotrexate and adalimumab sourced from the EU plus methotrexate in subjects with moderately to severely active rheumatoid arthritis who have had an inadequate response to methotrexate monotherapy.

Rivipansel — Pfizer announced in June 2015 that the first patient has been enrolled in the RESET (Rivipansel: Evaluating Safety, Efficacy and Time to Discharge) study, a Phase 3 clinical trial assessing the efficacy and safety of rivipansel for the treatment of vaso-occlusive crisis in hospitalized individuals with sickle cell disease who are six years of age or older. This multicenter, randomized, double-blind, placebocontrolled, parallel-group study is expected to enroll at least 350 people. Rivipansel has received Orphan Drug and Fast Track status from the FDA, and this study is being conducted under a Special Protocol Assessment, in agreement with the FDA.

Avelumab (MSB0010718C) — Merck KGaA and Pfizer announced in April 2015 the initiation and first patient treated in a Phase 3 study designed to assess the efficacy and safety of the investigational cancer immunotherapy avelumab, compared with docetaxel, in patients with stage IIIb/IV NSCLC who have experienced disease progression after receiving a prior platinum-containing doublet therapy. The Phase 3 study is an open-label, multicenter, 1:1 randomized clinical trial where patients with stage IIIb/IV NSCLC will receive either avelumab or docetaxel, regardless of programmed death-ligand 1 (PD-L1) status. Approximately 650 patients will participate across 290 sites in more than 30 countries in North America, South America, Asia, Africa and Europe. The study is part of the JAVELIN clinical trial program for avelumab.

PF-06439535 — In May 2015, Pfizer began dosing patients in a multinational Phase 3 clinical trial of PF-06439535, a potential biosimilar to Avastin(7) (bevacizumab). The Phase 3 clinical trial will evaluate the efficacy and safety of PF-06439535 plus paclitaxel and carboplatin against Avastin sourced from the EU plus paclitaxel and carboplatin by comparing the best confirmed objective response rate by week 19 in first-line treatment for patients with advanced (unresectable, locally advanced, recurrent or metastatic) non-squamous NSCLC.

Inotuzumab Ozogamicin — Pfizer announced in April 2015 that the Phase 3 INO-VATE ALL study investigating the treatment of inotuzumab ozogamicin met the primary endpoint of complete response or complete response with incomplete blood count recovery (CR/CRi) demonstrating a higher complete – 10 – hematologic remission rate in adult patients with relapsed or refractory CD22-positive acute lymphoblastic leukemia compared to that achieved with standard of care chemotherapy. Pfizer is discussing these data with the FDA and other regulatory agencies. Pfizer is continuing the study to allow for the data on OS, a separate primary endpoint, to mature.

Corporate Developments

Pfizer announced in June 2015 that it has entered into an agreement with GlaxoSmithKline to acquire its quadrivalent meningitis ACWY vaccines, Nimenrix and Mencevax, for a total consideration of approximately $130 million (€115 million). This transaction will add two high-quality and complementary vaccines to Pfizer’s portfolio, allowing the company to reach a broader global population. This transaction is not expected to have any significant impact on Pfizer’s 2015 financial performance. The transaction is subject to customary closing conditions as well as regulatory approvals in several markets, and is expected to close in the second half of 2015.

Pfizer announced in May 2015 that it received a request for additional information from the U.S. Federal Trade Commission (FTC) with respect to its previously announced pending acquisition of Hospira. The request for information from the FTC, often referred to as a "second request," was anticipated as part of the regulatory process under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Pfizer continues to work cooperatively and expeditiously with the FTC in connection with its review. The transaction is subject to customary closing conditions, including regulatory approvals in several jurisdictions. On May 13, 2015, Hospira shareholders voted in favor of the proposal to adopt the merger agreement, which was also a condition to closing the transaction. Pfizer and Hospira continue to expect the transaction to close in the second half of 2015.

In April 2015, Pfizer acquired a minority equity interest in AM-Pharma B.V., a privately held Dutch biopharmaceutical company focused on the development of recombinant human Alkaline Phosphatase for inflammatory diseases, and secured an exclusive option to acquire the remaining equity in the company. Under the terms of the agreement, Pfizer paid $87.5 million for both the exclusive option and the minority equity interest and Pfizer may make additional payments of up to $512.5 million upon exercise of the option and potential launch of any product that may result from this investment.

For additional details, see the attached financial schedules, product revenue tables and disclosure notice.

(1) Reported revenues is defined as revenues in accordance with U.S. generally accepted accounting principles (GAAP). Reported net income is defined as net income attributable to Pfizer Inc. in accordance with U.S. GAAP. Reported diluted earnings per share (EPS) is defined as reported diluted EPS attributable to Pfizer Inc. common shareholders in accordance with U.S. GAAP.

(2) Adjusted income and its components and Adjusted diluted EPS are defined as reported U.S. GAAP net income(1) and its components and reported diluted EPS(1) excluding purchase accounting adjustments, acquisition-related costs, discontinued operations and certain significant items. Adjusted revenues, Adjusted cost of sales, Adjusted selling, informational and administrative (SI&A) expenses, Adjusted research and development (R&D) expenses and Adjusted other (income)/deductions are income statement line items prepared on the same basis as, and therefore components of, the overall Adjusted income measure. As described under Adjusted income in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of Pfizer’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 29, 2015, management uses Adjusted income, among other factors, to set performance goals and to measure the performance of the overall company. We believe that investors’ understanding of our performance is enhanced by disclosing this measure. See the accompanying reconciliations of certain GAAP Reported to non-GAAP Adjusted information for the second quarter and first six months of 2015 and 2014, as well as reconciliations of full-year 2015 guidance for Adjusted income and Adjusted diluted EPS to full-year 2015 guidance for Reported net income(1) and Reported diluted EPS(1) . The Adjusted income and its components and Adjusted diluted EPS measures are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS.

(3) The 2015 financial guidance reflects the following:

Does not assume the completion of any business development transactions not completed as of June 28, 2015, including any one-time upfront payments associated with such transactions. 2015 financial guidance does not reflect any impact from the pending acquisition of Hospira. The transaction is expected to close during the second half of 2015.

Excludes the potential effects of the resolution of litigation-related matters not substantially resolved as of June 28, 2015.

Exchange rates assumed are a blend of the actual exchange rates in effect through second-quarter 2015 and the mid-July 2015 exchange rates for the remainder of the year. Excludes the impact of a potential devaluation of the Venezuelan bolivar.

Guidance for reported revenues(1) reflects the anticipated negative impact of $3.4 billion due to recent and expected generic competition for certain products that have recently lost or are anticipated to soon lose patent protection, partially offset by anticipated revenue growth from certain other products.

Guidance for reported revenues(1) also reflects the anticipated negative impact of $3.3 billion as a result of unfavorable changes in essentially all foreign exchange rates relative to the U.S. dollar compared to foreign exchange rates from 2014. The anticipated negative impact on reported(1) and adjusted(2) diluted EPS resulting from unfavorable changes in foreign exchange rates compared to foreign exchange rates from 2014 is approximately $0.19.

Guidance for the effective tax rate on adjusted income(2) does not assume the renewal of the U.S. R&D tax credit. The renewal of the R&D tax credit is not anticipated to have a material impact on the effective tax rate on adjusted income(2) .

Guidance for reported(1) and adjusted diluted EPS(2) assumes diluted weighted-average shares outstanding of approximately 6.25 billion shares, inclusive of share repurchases in 2015. Share repurchases in 2015 were composed of $1.0 billion of shares repurchased through January 30, 2015, a $5.0 billion accelerated share repurchase agreement executed in February 2015 and a $0.2 billion cash payment in July 2015 to satisfy the settlement terms of the accelerated share repurchase agreement. Pfizer elected to settle the terms of the accelerated share repurchase agreement with cash as opposed to the commensurate value in shares. Actual and projected dilution related to employee compensation programs is expected to partially offset these share repurchases.

(4) For a description of the revenues in each business, see the "Our Strategy––Commercial Operations" subsection in the Overview of Our Performance, Operating Environment, Strategy and Outlook section of Pfizer’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 29, 2015.

(5) Other includes revenues generated from Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales organization, and revenues related to our transitional manufacturing and supply agreements with Zoetis, Inc.

(6) Humira is a registered U.S. trademark of Abbvie Biotechnology Ltd.

(7) Avastin is a registered U.S. trademark of Genentech, Inc.

Apogenix Enters into Cooperation with R-Biopharm to Develop Companion Diagnostic Tests for Immuno-Oncology Candidate APG101

On July 28, 2015 Apogenix, a next generation immuno-oncology company, reported that it has entered into an agreement with R-Biopharm, a global provider of innovative clinical diagnostics, to develop companion diagnostic tests for Apogenix’ lead drug candidate APG101 (Press release, Apogenix, JUL 28, 2015, View Source [SID1234524546]). APG101 is a CD95 ligand inhibitor which restores the body’s immune response against tumors and inhibits invasive tumor cell growth. The drug candidate is being developed for the treatment of solid tumors and malignant hematological diseases.

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In a controlled phase II efficacy trial in patients with recurrent glioblastoma, treatment with APG101 in combination with radiotherapy has demonstrated clinical superiority in all study endpoints compared to treatment with radiotherapy alone. Glioblastoma patients with a certain biomarker associated with the CD95 ligand experienced the greatest benefit from treatment with APG101. The trial showed a statistically significant prolongation of overall survival in biomarker-positive patients treated with APG101, with a median overall survival of 16.1 months compared to 7.3 months in patients treated with radiotherapy alone.

Based on different test technologies including immunohistochemistry (IHC) and polymerase chain reaction (PCR), Apogenix and R-Biopharm will develop patient-stratifying companion diagnostic tests to identify glioblastoma patients who are most likely to benefit from treatment with APG101. The cooperation further includes the development of in vitro diagnostic tests to determine expression of the CD95 ligand in other types of tumors. Apogenix will validate the resulting diagnostic tests in a pivotal phase II/III trial in glioblastoma and in additional clinical trials for the treatment of other solid tumors.

"These diagnostic tests will allow us to develop APG101 as a targeted therapy for the treatment of cancer, so patients can benefit from a personalized treatment approach, " said Harald Fricke, M.D., Chief Medical Officer of Apogenix. "Since the CD95 ligand is expressed in many types of cancer, there is tremendous potential for the use of APG101. We look forward to joining forces with R-Biopharm and building on their long-standing experience and expertise in the development of companion and in vitro diagnostic tests."

"As a leading diagnostics partner in developing clinical test systems, R-Biopharm is passionate about bringing new diagnostic opportunities to the field of personalized medicine. This agreement is not only an acknowledgement of our companion diagnostic technology platforms, but also an important strategic step in expanding our companion diagnostics partnerships with leading pharmaceutical companies," said Dr. Frank Apostel, Vice President Companion Diagnostics of R-Biopharm. "We are very much looking forward to working with Apogenix to support their innovative and promising biopharmaceutical product and help to ensure patient access to this novel treatment as soon as possible."

Progenics Announces Breakthrough Therapy Designation for Azedra in Pheochromocytoma and Paraganglioma

On July 28, 2015 Progenics Pharmaceuticals, Inc. (Nasdaq:PGNX), an oncology company developing innovative ways to target and treat cancer, reported that the U.S. Food and Drug Administration (FDA) has designated Azedra as a Breakthrough Therapy for the treatment of patients with iobenguane-avid metastatic or recurrent pheochromocytoma and paraganglioma (Press release, Progenics Pharmaceuticals, JUL 28, 2015, View Source [SID:1234506726]).

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Azedra is currently being evaluated in a pivotal Phase 2b trial, which is being conducted under a Special Protocol Assessment Agreement (SPA), and has received Orphan Drug and Fast Track designations from the FDA.

The Breakthrough Therapy designation pathway was created by the FDA to expedite the development and review for a drug that treats a serious or life-threatening condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapies.

"This Breakthrough Therapy designation for Azedra reflects the urgent need for new options for patients suffering from pheochromocytoma and paraganglioma," stated Mark Baker, CEO of Progenics. "Azedra has the potential to be the first approved therapy for patients with these rare and devastating tumors, and this designation will allow for a close collaboration between Progenics and the FDA as we complete our ongoing pivotal Phase 2b trial and, assuming a positive trial outcome, advance Azedra through the regulatory review process."

About AZEDRA

Azedra is a radio-therapeutic with FDA Fast Track status currently being studied in a phase 2 registrational trial under a SPA with the FDA using a surrogate marker as registrational endpoint. In addition to potentially treating pheochromocytoma and paraganglioma, Azedra may also have utility in treating neuroblastoma and other neuroendocrine tumors. Clinical trials for Azedra have not been completed and regulatory approvals for Azedra remain subject to the successful completion of all required studies.

About Pheochromocytoma and Paraganglioma

Pheochromocytomas and paragangliomas are rare neuroendocrine tumors that arise from cells of the sympathetic nervous system. When pheochromocytomas are located outside the adrenal glands, they are called paragangliomas. Standard treatment options for these tumors include surgery, palliative therapy and symptom management. Malignant and recurrent pheochromocytomas and paragangliomas may result in unresectable disease with a poor prognosis, representing a significant management challenge with very limited treatment options and no approved anti-tumor therapies.

OncoMed Initiates Phase 1 Clinical Trial for Anti-RSPO3 Antibody

On July 28, 2015 OncoMed Pharmaceuticals, Inc. (NASDAQ:OMED), a clinical-stage company developing novel anti-cancer stem cell and immuno-oncology therapeutics, reported dosing of the first patient in its anti-RSPO3 antibody (OMP-131R10) Phase 1a/1b clinical trial (Press release, OncoMed, JUL 28, 2015, View Source [SID:1234506725]). Anti-RSPO3 is the first drug in its class to target the R-spondin-LGR pathway, an important cancer stem cell pathway identified by OncoMed researchers.

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"The inhibition of RSPO3 has shown robust preclinical activity against a number of solid tumor types. In this trial, we look forward to establishing a suitable dose and exploring this antibody’s safety and initial efficacy," said Jakob Dupont, M.D., OncoMed’s Chief Medical Officer. "In addition, studies using our human tumor xenograft models have demonstrated a strong correlation between activity and RSPO3 biomarkers as well as potent activity in the colorectal cancer setting, which we will examine in the second part of this comprehensive Phase1a/1b trial."

The Phase 1a/1b clinical trial is initially enrolling patients with advanced refractory solid tumors. Patients will receive escalating doses of anti-RSPO3 until disease progression. The open-label study is designed to assess the safety, pharmacokinetics, pharmacodynamics and initial evidence of efficacy of the anti-RSPO3 antibody. Once a single-agent dose has been identified, biomarker-selected patients will be enrolled in a Phase 1a expansion arm to obtain additional preliminary information on possible anti-tumor activity. In the Phase 1b portion of the trial, anti-RSPO3 will also be tested in second-line colorectal cancer patients in combination with the chemotherapeutic standard of care in metastatic colon cancer, known as FOLFIRI (folinic acid, fluorouracil and irinotecan). The trial is being conducted at five sites in the United States.

Dr. Gail Eckhardt, Professor, Division of Medical Oncology and Stapp-Harlow Endowed Chair at the University of Colorado, is a Principal Investigator of the study who treated the first patient on the clinical trial. Dr. Eckhardt commented, "RSPO3 is an exciting new therapeutic target in solid tumors and in particular in colorectal cancer. OncoMed’s OMP-131R10 is a novel antibody approach that will hopefully provide clinical benefit and therapeutic options for cancer patients."

R-spondin proteins bind to or activate leucine-rich repeat containing G-coupled receptors (LGRs) and blocking this activity has been shown to inhibit tumor growth. In preclinical studies OncoMed’s anti-RSPO3 antibody demonstrated robust in vivo anti-tumor efficacy as a single agent and in combination with standard of care across a range of solid tumors, including colon, lung, ovarian, and pancreatic cancers, among others. The anti-RSPO3 antibody delayed tumor recurrence following termination of chemotherapy, and decreased the frequency of cancer stem cells.

The anti-RSPO3 antibody represents the third drug in the clinic that is part of OncoMed’s collaboration with Celgene.

Aeterna Zentaris Grants Option to Develop and Commercialize Oral Allogenic Cancer Vaccine Technology

On July 28, 2015 Aeterna Zentaris Inc. (NASDAQ: AEZS) (TSX: AEZ) (the "Company") reported that it has granted to German life sciences entrepreneurs with a proven track-record of funding the development and commercialization of biotechnology (collectively, the "Optionee"), an option to license the Company’s live recombinant oral allogenic tumor vaccine technology (the "Technology"), including AEZS-120, the most advanced product candidate for prostate cancer which is ready to enter a Phase 1 clinical trial (Press release, AEterna Zentaris, JUL 28, 2015, View Source [SID:1234506719]).

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This option is granted to the Optionee worldwide, for a period of twelve months, in exchange for an upfront fee.

Pursuant to the option agreement, the Optionee has the right to obtain a worldwide exclusive license to develop, use and sell products relating to the Technology and AEZS-120, in exchange for milestone payments and royalties on net sales of any product developed from the Technology and an equity interest in the company formed to develop the Technology. At the present time, Aeterna Zentaris holds worldwide rights to the Technology, including AEZS-120.

David A. Dodd, Chairman and CEO of Aeterna Zentaris, commented, "This agreement is part of our strategy of leveraging some of our promising early-stage drug candidates in order to generate potential long-term value without having to invest in their development. Our live recombinant oral allogenic cancer vaccine is a novel approach to treating cancer and could prove to be a beneficial option for the millions of people suffering from different types of cancer."

About AEZS-120

AEZS-120 is a live recombinant oral allogenic cancer vaccine candidate based on Salmonella typhi Ty21a as a carrier strain. Salmonella typhi Ty21a is an approved oral typhoid vaccine which has been safely applied in more than 250 million doses. The principle of AEZS-120 is based on the recombinant expression of prostate specific antigen fused to the B subunit of cholera toxin and a secretion signal in the presence of the Escherichia coli type I hemolysin secretion system. The proprietary system allows the secretion of the antigen, together with an immunological adjuvant which has been demonstrated to be required for optimal induction of CD8 T-cell responses by recombinant Salmonella based bacterial vaccines. The proof-of-concept was demonstrated for the mouse homologue of AEZS-120 in a mouse tumor-challenge model. In general, by varying the antigen and/or the carrier, this proprietary platform technology should be suitable for virtually any therapeutic or prophylactic vaccine indication with a favorable cost of goods expectation in large scale.