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Fortress Biotech Reports Second Quarter 2016 Financial Results and Recent Corporate Highlights

On August 9, 2016 Fortress Biotech, Inc. (NASDAQ: FBIO) ("Fortress"), a biopharmaceutical company dedicated to acquiring, developing and commercializing novel pharmaceutical and biotechnology products, reported its financial results and recent corporate highlights for the quarter ended June 30, 2016 (Press release, Fortress Biotech, AUG 8, 2016, View Source;FID=1500089727 [SID:1234514496]).

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Dr. Lindsay A. Rosenwald, Chairman, President and CEO of Fortress, said, "During the second quarter of 2016, we attained several milestones, including the commercialization of our first two products from Journey Medical Corporation’s ("Journey") dermatology
franchise: Luxamend Wound Cream and Ceracade Skin Barrier Emulsion. Our subsidiary Checkpoint Therapeutics, Inc. ("Checkpoint Therapeutics") also acquired an exclusive, worldwide license to BRD4-inhibiting (from the Bromodomain and ExtraTerminal motif ("BET") inhibitor class of anti-cancer proteins) compounds for solid tumors from Jubilant Biosys Limited ("Jubilant"). In addition, Checkpoint Therapeutics entered a sublicense agreement with TG Therapeutics, Inc., a related party ("TG
Therapeutics"), to develop and commercialize the BRD4-inhibiting compounds for hematological malignancies, while Checkpoint Therapeutics retains the right to develop and commercialize these compounds for solid tumors. We believe clinical and corporate
developments such as these will help position us to diversify our pipeline during the second half of 2016."

Financial Results:
 At June 30, 2016, Fortress’ consolidated cash and cash equivalents totaled $71.3 million compared to $81.4 million at March 31, 2016 and $98.2 million as of December 31, 2015, a decrease of $10.1 million for the quarter, of which $6.6 million relates to our subsidiaries, and $26.9 million year-to-date, of which $16.1 million relates to our subsidiaries. These totals exclude restricted cash of $14.6 million.

 Total revenue for the second quarter of 2016 was $2.2 million consisting of $1.0 million of net product revenue from our subsidiary Journey and $1.2 million of collaboration revenue from a related party, compared with no revenue reported during
last year’s second quarter. $2.9 million in total revenue was reported for the first six months of 2016 consisting of $1.4 million of net product sales from Journey and $1.5 million of collaboration revenue from a related party, compared with $0.5 million of
collaboration revenue from a related party reported for the first six months of 2015.

 Research and development expenses were $6.3 million, of which $4.0 million relates to our subsidiaries for the second quarter of 2016 and $14.1 million, of which $9.0 million relates to our subsidiaries for the first six months of 2016. This compares with $2.4 million, of which $1.1 million relates to our subsidiaries for the second quarter of 2015 and $4.1 million, of which $1.2 million relates to our subsidiaries for the first six months of 2015. Noncash stock-based compensation expense included in research and development for the second quarter of 2016 was $1.1 million, compared to $0.6 million for the second quarter of 2015, and $2.4 million for the first six months of 2016, compared with $0.9 million for the first six months of 2015.

 Research and development licenses acquired expenses were $2.0 million for the second quarter of 2016 and $2.1 million for the first six months of 2016, compared to $1.5 million for the second quarter 2015 and $9.0 million for the first six months of 2015.

 General and administrative expenses were $8.6 million, of which $3.7 million relates to our subsidiaries for the second quarter of 2016 and $16.6 million, of which $6.6 million relates to our subsidiaries for the first six months of 2016, compared to $3.8 million, of which $0.3 million relates to our subsidiaries for the second quarter of 2015 and $7.3 million, of which $1.6 million relates to our subsidiaries for the first six months of 2015. Noncash stock-based compensation expense included in general
and administrative for the second quarter of 2016 was $1.9 million, compared to $1.3 million for the second quarter of 2015, and $3.5 million for the first six months of 2016, compared with $2.5 million for the first six months of 2015.

 Net loss was $12.5 million, or $0.31 per share, for the second quarter of 2016, compared to a net loss of $6.2 million, or $0.16 per share, for the second quarter of 2015. For the first six months of 2016, net loss was $24.7 million or $0.62 per share,compared with $18.2 million or $0.47 per share in the first six months of 2015.

Recent Corporate Highlights:
Avenue Therapeutics
 Avenue completed an End-of-Phase 2 ("EOP2") meeting with the FDA and, based on the outcome of the EOP2 meeting, Avenue anticipates that its Phase 3 program will consist of three studies: an efficacy and safety study in an orthopedic model, an
efficacy and safety study in a soft tissue model, and an open label safety study.

Checkpoint Therapeutics
 In May 2016, Jubilant and Checkpoint Therapeutics announced the signing of an exclusive, worldwide license agreement under which Jubilant out-licensed to Checkpoint Therapeutics a family of patents covering compounds that inhibit BRD4, a member of the BET domain for cancer treatment. In connection with the license agreement with Jubilant, Checkpoint Therapeutics entered into a sublicense agreement with TG Therapeutics to develop and commercialize the licensed compounds for hematological malignancies, while Checkpoint Therapeutics retains the right to develop and commercialize these compounds for solid tumors.

Journey Medical Corporation
 In June 2016, sales began for Luxamend Wound Cream and Ceracade Skin Barrier Emulsion, the first two products in Journey’s dermatology franchise. Both products were showcased at the 2016 American Academy of Dermatology (AAD)
Summer Meeting in July 2016.

 In July 2016, Journey received FDA approval for the manufacturing of a product for the treatment of acne, for which it had entered into a license and supply agreement in 2015. Journey expects sales of this product to begin in the fourth quarter of 2016.
Mustang Bio, Inc.
 In April 2016, Mustang announced that two abstracts pertaining to MB-101 (IL13Rα2‐specific CAR-T cells) for the treatment of glioblastoma were selected for presentation at the American Society of Gene and Cell Therapy’s 19th Annual Meeting ("ASGCT"). Pre-clinical and preliminary Phase I data were presented at ASGCT (Free ASGCT Whitepaper)

 In May 2016, an oral presentation related to MB-101 (IL13Rα2‐specific CAR-T cells) was presented by City of Hope investigators at the ASGCT (Free ASGCT Whitepaper) at the Marriott Wardman Park Hotel in Washington, DC.

Fortress Biotech
 On June 10, 2016, CB Pharma Acquisition Corp ("CB Pharma") held an extraordinary general meeting of its shareholders. At such meeting, the shareholders approved each of the following items: (i) an amendment to the CB Pharma’s Amended and Restated Memorandum and Articles of Association (the "Charter") to extend the date by which CB Pharma has to consummate a business combination from June 12, 2016 to December 12, 2016 (the "Extension"), (ii) an amendment to the Charter to allow the holders of the CB Pharma’s ordinary shares issued in the their initial public offering to elect to convert their shares into their pro rata portion of the funds held in trust, if the Extension is approved, and (iii) the change of CB Pharma’s name from "CB Pharma Acquisition Corp." to "Origo Acquisition Corporation" ("Origo"). In connection with the meeting, Fortress transferred 1,050,000 of its CB Pharma ordinary shares to Origo, retaining a holding of 265,000 Origo shares.

 In May 2016, positive data from the Phase 1/2 study of CNDO-109-Activated Allogeneic Natural Killer (NK) Cells in patients with acute myeloid leukemia were presented in an oral session at the Innate Killer Summit 2016 in San Diego, CA.

 In July 2016 Fortress’ stock was added to the Russell 2000 Index.

MannKind Corporation Reports 2016 Second Quarter Financial Results

On August 8, 2016 MannKind Corporation (Nasdaq:MNKD) (TASE:MNKD) reported financial results for the second quarter and the six months ended June 30, 2016 (Press release, Mannkind, AUG 8, 2016, View Source [SID:1234514495]).

For the second quarter ended June 30, 2016, total operating expenses were $19.1 million as compared to $24.1 million for the same quarter in 2015. Research and development expenses were $4.3 million for the second quarter of 2016, a decrease of 44% compared to the second quarter of 2015, primarily due to a reduction in force in 2015 following the completion of Afrezza registration trials. Selling, general and administrative costs were $11.1 million for the second quarter of 2016, an increase of 5% compared to general and administrative costs for the second quarter of 2015, mainly due to sales and marketing expenses.

Manufacturing of commercial product resumed in the second quarter of 2016, in preparation for the relaunch of Afrezza in the third quarter of 2016, resulting in the recognition of product manufacturing costs of $3.7 million for the three months ended June 30, 2016. With limited production and underutilization of the manufacturing facility in the same period of 2015, product manufacturing costs were $5.7 million for the second quarter of 2015 due to under absorbed labor and overhead.

For the first six months ended 2016, total operating expenses were $39.1 million, a decrease of 15% as compared to $45.8 million for the same period in 2015. Research and development expenses were $9.4 million for the six months ended June 30, 2016, a decline of 45% compared to the same period in 2015, primarily due to the reduction in force in 2015 and the transition from development to commercial activities. Selling, general and administrative expenses for the six months ended June 30, 2016 were $18.5 million, a decrease of 13% compared to the same period in 2015, primarily due to the reduction in force, reduced professional fees related to strategic planning activities and lower non-cash stock compensation expense in 2015, offset by increased sales and marketing expense in 2016. Product manufacturing costs were $11.2 million for the six months ended June 30, 2016, an increase of 47% compared to the same period in 2015, as manufacturing of commercial product resumed in preparation for the relaunch of Afrezza in the third quarter of 2016.

For the three months ended June 30, 2016, the Company earned $0.3 million under the Sanofi License Agreement, which is required to be applied as a prepayment against the balance owed under the Sanofi Loan Facility. As of June 30, 2016, the total amount owed to Sanofi is $70.3 million, which includes accrued interest of $4.3 million.

Included in net loss for the three and six months ended June 30, 2016 is the non-cash effect of a $5.3 million fair value adjustment of the warrant liability related to the registered direct public offering completed in May 2016.

The net loss for the second quarter of 2016 was $30.0 million, or $0.07 per share, based on 455.3 million weighted average shares outstanding, compared with to the net loss of $28.9 million, or $0.07 per share, based on 401.0 million weighted average shares outstanding for the second quarter of 2015. The number of common shares outstanding at June 30, 2016 was 477.7 million.
Cash and cash equivalents at June 30, 2016 were $63.7 million, compared to $27.7 million at March 31, 2016. In May 2016, the Company received net proceeds of $47.4 million upon completion of a registered direct public offering, $9.2 million from Sanofi for the sale of insulin inventory in connection with a contractual obligation upon termination of the Sanofi License Agreement, and $0.7 million from Connecticut as a Research & Development tax credit. Currently, $30.1 million remains available for borrowing under the amended loan arrangement with The Mann Group along with $50.0 million available under the ATM facility.

8-K – Current report

On August 8, 2016 FibroGen, Inc. (NASDAQ: FGEN) ("FibroGen"), a research-based biopharmaceutical company, reported financial results for the quarter ended June 30, 2016 (Filing, Q2, FibroGen, 2016, AUG 8, 2016, View Source [SID:1234514414]).

"We continue to develop our multiple key programs across focused therapeutic areas," said Thomas B. Neff, chief executive officer of FibroGen. "Working jointly with our partners, Astellas and AstraZeneca, we have advanced global clinical development for roxadustat for treatment of anemia in chronic kidney disease patients to Phase 3 in four independent regulatory pathways − the U.S., Europe, China, and Japan − and remain on track to initiate new drug application submissions in 2016 in China, and in 2018 in the U.S. We have completed enrollment in the placebo-controlled portion of our Phase 2 study of FG-3019 (now known as pamrevlumab) for treatment of idiopathic pulmonary fibrosis, and expect to report data from this study in the middle of next year, and our Phase 2 studies in pancreatic cancer and Duchenne muscular dystrophy continue to progress."
Program Updates
Anemia of Chronic Kidney Disease (CKD): roxadustat (FG-4592)

·
China Phase 3 enrollment on track: Completed enrollment in a 300-patient dialysis study, one of two Phase 3 pivotal trials in China; expect to complete enrollment in the second study, a 150-patient non-dialysis study now over 70% enrolled, in Q3 of this year. We expect first reportable data in each of the Phase 3 studies by the end of the year.

·
The independent data safety monitoring board overseeing roxadustat U.S and Europe Phase 3 studies met in July 2016 to review the roxadustat safety data, and confirmed that the trials should proceed with current Phase 3 protocols without modification.

·
Continue to expect to initiate new drug application submissions for roxadustat in 2016 for China and in 2018 for the U.S.
Fibrosis and Other Fibroproliferative Diseases: pamrevlumab (FG-3019)

·
Completed enrollment in the 48-week main study portion of a placebo-controlled Phase 2 trial for treatment of IPF. We plan to report topline data for the entire study in mid-2017, including the six month combination therapy sub-study in which patients will receive pamrevlumab in combination with pirfenidone or nintedanib, which will continue to enroll until the end of the year.

·
Continue to advance our Phase 2 trial in patients with unresectable, locally advanced pancreatic cancer, and anticipate that we will present available findings early next year.

·
Enrollment continues in our open-label Phase 2 study of pamrevlumab in non-ambulatory Duchenne muscular dystrophy (DMD) patients.
Financial Highlights

·
Net income per basic share for the quarter ended June 30, 2016, was $0.39, and $0.35 on a per diluted share basis.

·
At June 30, 2016, FibroGen had $368.6 million of cash, cash equivalents, investments, receivables, and restricted cash.

·
During the quarter ended June 30, 2016, we received a $62.0 million upfront payment under the AstraZeneca Agreement. We also recognized $10.0 million milestone revenue under the Astellas Agreement, which payment was received in early July 2016.

ChemoCentryx Reports Second Quarter 2016 Financial Results and Provides Corporate Update

On August 8, 2016 ChemoCentryx, Inc., (Nasdaq:CCXI), a clinical-stage biopharmaceutical company developing orally-administered therapeutics to treat autoimmune diseases, inflammatory disorders and cancer, reported financial results for the second quarter ended June 30, 2016 and provided an update on the Company’s clinical development activities (Press release, ChemoCentryx, AUG 8, 2016, View Source [SID:1234514396]).

"The positive results from the CLASSIC trial with CCX168 mark the successful culmination of our AAV Phase II program and we now look forward to initiating Phase III development of CCX168 in AAV," said Thomas J. Schall, Ph.D., President and Chief Executive Officer of ChemoCentryx. "We also anticipate reporting initial results from our ongoing trial of CCX872 in patients with pancreatic cancer during the second half of this year. We are very pleased to have achieved such important clinical, regulatory and business development goals thus far in 2016 and with them, the added validation of our approach to treating autoimmune diseases, inflammatory disorders and cancer. We look forward to building on that momentum as we enter the second half of the year."

Pipeline Developments Across Key Therapeutic Areas

Orphan and Rare Diseases: CCX168 is an orally-administered complement inhibitor targeting the C5a receptor (C5aR), and is being developed for several rare disease indications, including ANCA-associated vasculitis (AAV) and atypical hemolytic uremic syndrome (aHUS). CCX168 acts by blocking the destructive action of neutrophils that are activated as a consequence of the complement protein known as C5a binding to C5aR on neutrophils during autoimmune inflammatory events including the destruction of blood vessels in AAV.

Reported positive top-line results from the Phase II CLASSIC trial with CCX168 in patients with AAV. The goal of the CCX168 development program in AAV is to reduce or eliminate the use of chronic high dose glucocorticosteroids (steroids) in the current standard of care (SOC) treatment. To inform potential regulatory queries and eventual labeling requirements for CCX168 in AAV, the Phase II CLASSIC study was designed largely to assess the safety profile of CCX168 when added to the current SOC. The CLASSIC safety trial met its objectives as follows:
The addition of CCX168 to current SOC therapy did not add safety concerns beyond those seen with SOC alone. The incidence of serious adverse events (SAEs) was similar across treatment groups in the study and consistent with effects related to background therapy.
While the CLASSIC safety study was not designed or powered for inferential statistical analyses on efficacy, the Birmingham Vasculitis Activity Score (BVAS) response endpoint was numerically superior in patients who received CCX168, and rapid BVAS remission (BVAS = 0 at week 4) was also seen in patients receiving the clinically relevant 30 mg dose of CCX168 + SOC (5 of 15 patients) vs. SOC alone (2 of 13 patients) and SOC + 10 mg CCX168 (1 of 12 patients).
Announced exclusive regional license agreement with Vifor Pharma to commercialize CCX168 in Europe and certain other markets. The agreement included $85 million upfront payment to ChemoCentryx, comprising $60 million in cash in addition to $25 million equity investment from Vifor Pharma. ChemoCentryx retains all ongoing and future development of CCX168, other than country-specific development in the licensed territories, as well as commercialization rights to CCX168 in the United States and other countries not licensed to Vifor Pharma.
Granted PRIority MEdicines (PRIME) designation by the European Medicines Agency (EMA) for CCX168 for the treatment of AAV. PRIME provides enhanced scientific guidance and supports accelerated review of investigational therapies that show the potential to benefit patients with unmet medical needs based on clinical data.
Awarded a U.S. Food and Drug Administration (FDA) Orphan Products Development one-year grant of $500,000 to assist in the clinical development of CCX168 for treatment of AAV.
Presented positive results from the Phase II CLEAR trial at the European Renal Association – European Dialysis and Transplant Association (ERA-EDTA) Congress. The CLEAR trial met its primary endpoint based on the BVAS response at week 12 in patients receiving CCX168, compared to those patients receiving the high dose steroid-containing SOC. Specifically, all treatment groups receiving CCX168 demonstrated a numerically superior, statistically significant (P=0.002) non-inferior clinical efficacy outcome when compared to SOC.
Presented preclinical data at the ERA-EDTA Congress which used CRISPR-Cas9 technology to create novel murine models of complement over activation and C5a generation, as found in aHUS and C3 glomerulopathy (C3G), and found evidence of impaired renal function in these mice.
Immuno-Oncology: CCX872 is a potent and selective inhibitor of the chemokine receptor known as CCR2, and is the Company’s most advanced drug candidate that is designed to block the infiltration of immune suppressor cells in the tumor microenvironment. CCX872 is being evaluated in patients with non-resectable pancreatic cancer in an ongoing, multi-center clinical trial. The primary outcome measurement of the study is progression-free survival (PFS) after at least 24 weeks of treatment. Overall response rate after 12 weeks of treatment will also be evaluated. ChemoCentryx is conducting earlier stage research with various chemokine receptor inhibitors, such as CCX9588, an inhibitor of the chemokine receptor known as CCR1, in combination with checkpoint inhibitors. The Company’s immuno-oncology efforts further include research to identify potential drug candidates targeting additional receptors that are believed to play an important role in the tumor microenvironment.

Advanced Phase Ib pancreatic cancer trial of CCR2 inhibitor CCX872 in combination with FOLFIRINOX; and
Identified preclinical candidates that target CXCR2 and CXCR7, two receptors that are believed to play an important role in the tumor microenvironment.
Other Inflammatory and Autoimmune Diseases: Research suggests that a type of T cells known as Th-17 cells, which produce the pro-inflammatory cytokine IL-17, are involved in the origin and development of many autoimmune diseases, including psoriasis. It is thought that therapeutic solutions to Th-17 driven autoimmune diseases could include inhibiting CCR6 inhibitor, and ChemoCentryx has produced several unique CCR6 inhibitor candidates and demonstrated that Th-17 cells are regulated by CCR6.

Presented preclinical data demonstrating that novel CCR6 inhibitors developed by ChemoCentryx have efficacy in models of psoriasis and achieved equivalent results when compared to an antibody to the IL-17 receptor. These novel CCR6 inhibitors reduced skin inflammation in models of psoriasis, and reduced the number of IL-17-secreting T cells in psoriatic skin. These results were presented at the 2016 Society for Investigational Dermatology Annual Meeting.
Anticipated Milestones

Orphan and Rare Diseases:

Evaluate formal feedback from End of Phase II and scientific advice meetings with U.S. and EU regulatory agencies and formalize the CCX168 AAV Phase III development plan in the second half of 2016;
Initiate Phase III development program with CCX168 for the treatment of AAV by the end of 2016; and
Report early results from the Phase II pilot study of CCX168 in aHUS patients who are on dialysis in late 2016.
Immuno-Oncology:

Report overall response rate and initial PFS data from pancreatic cancer trial of CCX872 in combination with FOLFIRINOX in the third and fourth quarter 2016, respectively.
Chronic Kidney Disease:

Review End of Phase II meeting plans and a potential Phase III clinical development program for CCX140 in diabetic nephropathy in the context of a partnership.
Second Quarter 2016 Financial Results and Outlook

Cash, cash equivalents and investments totaled $139.9 million at June 30, 2016, and include the $85.0 million upfront payment received in connection with the partnership with Vifor Pharma announced during the second quarter.

Revenue was $2.8 million for the three months ended June 30, 2016 compared to zero in the same period in 2015. The increase in revenue from 2015 to 2016 was due to: (i) amortization of the upfront payment from Vifor Pharma and (ii) grant revenue from the FDA to support the clinical development of CCX168 for the treatment of patients with AAV.

Research and development expenses were $9.1 million for the three months ended June 30, 2016 compared to $8.6 million reported for the same period in 2015. The increase in research and development expenses from 2015 to 2016 was primarily attributable to higher expenses associated with CCX872, our second generation CCR2 inhibitor, following the completion of enrollment of our clinical trial in patients with advanced pancreatic cancer. This increase was partially offset by lower expenses associated with CCX168, our C5aR inhibitor, due to the completion of the CLEAR Phase II clinical trial in Europe for the treatment of AAV and the completion of the treatment period in the CLASSIC Phase II clinical trial for the same in North America in 2016.

General and administrative expenses were $3.9 million for the three months ended June 30, 2016 compared to $3.6 million for the comparable period in 2015. The increase from 2015 to 2016 was primarily due to higher intellectual property related expenses and travel and professional fees associated with our business development efforts.

Net loss was $10.0 million for the second quarter ended June 30, 2016 compared to $12.1 million in the same period in 2015.

Total shares outstanding at June 30, 2016 were approximately 47.8 million shares.

About ANCA-Associated Vasculitis and Other Rare Renal Diseases

Anti-neutrophil cytoplasmic antibody (ANCA)-associated vasculitis, or AAV, is a type of rare autoimmune inflammation caused by auto-antibodies. AAV encompasses granulomatosis with polyangiitis (GPA, formerly known as Wegener’s granulomatosis), microscopic polyangiitis (MPA), eosinophilic polyangiitis (formerly Churg-Strauss syndrome) and renal limited vasculitis.

AAV represents a severe and often fatal autoimmune disease that is characterized by inflammation that can destroy different organ systems. AAV is the lead indication in the Company’s orphan and rare disease program which has the objective of eliminating chronic high dose steroids, which are associated with significant safety issues including death, from the standard of care (SOC) regimen in AAV and replace steroids with CCX168.

AAV affects approximately 40,000 people in the U.S. (with approximately 4,000 new cases each year) and greater than 75,000 people in Europe (with at least 7,500 new cases each year), and is currently treated with courses of immuno-suppressants (cyclophosphamide or rituximab) combined with high dose steroid administration. Following initial treatment, up to 30 percent of patients relapse within six to 18 months, and approximately half of all patients will relapse within three to five years.

Current SOC for AAV is associated with significant safety issues. First year mortality is approximately 11 to 18 percent. The single major cause of premature mortality is not disease-related adverse events, but rather infection that is thought largely to be a consequence of steroid administration. Indeed, the multiple adverse effects of courses of steroid treatment (both initial courses and those that are repeated as a consequence of relapse) are major causes of both short-term and long-term disease and death. Such therapy related adverse events contribute significantly to patient care costs, as well as to the diminution of quality of life for patients.

By damaging the body’s small blood vessels, AAV affects many organ systems, mostly the kidneys, eyes, lungs, sinuses and nerves. This damage is caused by the destructive activity of inflammatory leukocytes in the body, with neutrophils considered to be the terminal effector cell. In AAV, neutrophils are attracted to sites of vascular destruction as well as activated at those sites by the activity of the complement system product known as C5a and its receptor, C5aR, which is the target of CCX168. By blocking the C5aR, CCX168 is thought to reduce vasculitis by reducing neutrophil activation, accumulation, and adhesion, as well as vascular permeability.

Atypical hemolytic uremic syndrome, or aHUS, an ultra-rare, life threatening disease that causes chronic blood vessel damage, thrombosis or clotting within blood vessels, hemolysis or red blood cell rupture, and sudden, progressive organ failure, such as kidney failure. The disease is caused by genetic defects in factors that control the activation of the complement system. Current treatment options are still quite limited and prognosis and quality of life are extremely poor.

About Pancreatic Cancer

It is estimated that over 337,000 cases of pancreatic cancer are diagnosed worldwide every year, accounting for 2.4 percent of all cancers. The incidence of pancreatic cancer in the U.S. is about 45,000, with prevalence being only negligibly higher owing to the poor survival rates on current therapy. Current standards of care include surgical resection and chemotherapeutic regimens such as gemcitabine and FOLFIRINOX. These regimens are limited by marked toxicities. Almost 67 percent of cases are diagnosed in people aged 65 and over. In the U.S., pancreatic cancer is the fourth most common cause of deaths due to cancer. Pancreatic cancer has a low survival rate regardless of stage of disease, with 93 percent of patients dying from their disease within five years.

Celldex Reports Second Quarter 2016 Results

On August 8, 2016 Celldex Therapeutics, Inc. (NASDAQ:CLDX) reported business and financial highlights for the second quarter ended June 30, 2016 (Press release, Celldex Therapeutics, AUG 8, 2016, View Source [SID:1234514393]).

"Celldex continues to build one of the most robust pipelines in immuno-oncology, most recently advancing CDX-014 into the clinic in renal cell carcinoma," said Anthony Marucci, Co-founder, President and Chief Executive Officer of Celldex Therapeutics. "In collaboration with our investigators, we also presented a significant body of data in the second quarter with eight presentations across both AACR (Free AACR Whitepaper) and ASCO (Free ASCO Whitepaper) that spoke to the broad utility of our product candidates in combination immunotherapy and highlighted a number of the novel targets we are pursuing."

"We continue to enroll patients to the pivotal METRIC study of glembatumumab vedotin in triple negative breast cancer, with a focus on a number of new sites in Europe that were added over the last quarter and look forward to presenting data from the Phase 2 study of glembatumumab vedotin in metastatic melanoma later this year," concluded Marucci.

Program Updates:

Glembatumumab vedotin ("glemba"; CDX-011), an antibody-drug conjugate (ADC) targeting gpNMB in multiple cancers

Enrollment continues in the Company’s Phase 2b randomized study (METRIC) of glembatumumab vedotin in patients with metastatic triple negative breast cancers that overexpress gpNMB, a molecule associated with poor outcomes for triple negative breast cancer patients and the target of glembatumumab vedotin. Enrollment is open across the United States, Canada, and Australia and opened in the European Union in April, with close to 25 sites added in the EU in the second quarter. Additional sites continue to be added to support enrollment completion.

Patient enrollment is complete, and the primary endpoint has been met in the Phase 2 single-agent study of glembatumumab vedotin in metastatic melanoma (post-progression on checkpoint therapy). The primary endpoint of the study, objective response rate, required a minimum of six responses in the first 52 patients to be deemed successful. Celldex plans to present data from this study at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress in October 2016. As previously announced, the Company has amended the protocol to add a second cohort of patients to a glembatumumab vedotin and varlilumab combination arm to assess the potential clinical benefit of the combination and to explore varlilumab’s potential biologic and immunologic effect when combined with an ADC. This additional cohort is open to enrollment.

Celldex is also evaluating glembatumumab vedotin in other cancers in which gpNMB is expressed.

Celldex has entered into a collaborative relationship with PrECOG, LLC, which represents a research network established by the Eastern Cooperative Oncology Group (ECOG), and PrECOG, LLC is conducting a Phase 1/2 study in squamous cell lung cancer. This study opened to enrollment in April 2016.

Celldex and the National Cancer Institute (NCI) have entered into a Cooperative Research and Development Agreement (CRADA) under which the NCI is sponsoring two studies of glembatumumab vedotin—one in uveal melanoma and one in pediatric osteosarcoma. Both studies are currently open to enrollment.
Varlilumab ("varli"; CDX-1127), a fully human monoclonal agonist antibody that binds and activates CD27, a critical co-stimulatory molecule in the immune activation cascade

The Phase 2 portion of the varlilumab and nivolumab (Opdivo) study opened to enrollment in April 2016. A protocol amendment was recently finalized to include additional arms evaluating alternate dosing schedules in both renal cell carcinoma and squamous cell head and neck cancer. The non-small cell lung cohort was removed prior to enrolling any patients to accommodate the addition of these new arms. As amended, the overall study size has increased and includes cohorts in colorectal cancer (n=18), ovarian cancer (n=18), head and neck squamous cell carcinoma (n=48), renal cell carcinoma (n=75) and glioblastoma (n=20). The study is being conducted by Celldex under a clinical trial collaboration with Bristol-Myers Squibb Company. The companies are sharing development costs.

Data from the Phase 1 portion (n=36) of the varlilumab and nivolumab study were presented at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting in April. The combination showed acceptable tolerability and safety across all dose levels without any evidence of increased autoimmunity or inappropriate immune activation. Combination therapy led to marked changes in the tumor microenvironment including increased infiltrating CD8+ T cells and increased PD-L1 expression, which have been shown to correlate with a greater magnitude of treatment effect from checkpoint inhibitors in other clinical studies. Additional favorable immune biomarkers, such as increase in inflammatory chemokines and decrease in T regulatory cells, were also noted. In a subset of patients (n=17) on study who had both pre- and post-tumor biopsies available, preliminary evidence also suggested a correlation between biomarker data and stable disease or better in seven of these patients (4 ovarian cancer, 2 colorectal cancer, 1 squamous cell carcinoma of the head and neck).

Enrollment has been completed in the Phase 1 dose-escalation portion of the Phase 1/2 study of varlilumab and atezolizumab (Tecentriq; anti-PDL1) in patients with multiple solid tumors. The Company anticipates the Phase 2 portion of the study in renal cell carcinoma will be initiated in the third quarter of this year. This study is being conducted by Celldex under a clinical trial collaboration with Roche. Roche is providing study drug, and Celldex is responsible for conducting and funding the study.

Additional combination studies of varlilumab continue to enroll patients including:

A Phase 1/2 safety and tolerability study examining the combination of varlilumab and sunitinib (Sutent) in patients with metastatic clear cell renal cell carcinoma. The Company anticipates the Phase 1 portion of the study will complete enrollment in the next few months and that the Phase 2 portion of the study will initiate by year-end.
A Phase 1/2 safety and tolerability study examining the combination of varlilumab and ipilimumab (Yervoy) in patients with stage III or IV metastatic melanoma. In the Phase 2 portion of the study, patients with tumors that express NY-ESO-1 will also receive Celldex’s CDX-1401, an NY-ESO-1-antibody fusion protein for immunotherapy.
As discussed above, a Phase 2 study of varlilumab and glembatumumab vedotin in metastatic melanoma (post-progression on checkpoint therapy).
CDX-1401, an NY-ESO-1-antibody fusion protein for immunotherapy

As discussed above, a Phase 1/2 study examining the combination of varlilumab and ipilimumab continues to enroll patients with stage III or IV metastatic melanoma. In the Phase 2 portion of the study, patients with tumors that express NY-ESO-1 will also receive CDX-1401.

Celldex continues to support several external collaborations, including an NCI sponsored Phase 2 study of CDX-1401 and CDX-301 for patients with metastatic melanoma, which has completed enrollment (n=60 patients; not selected for NY-ESO-1 expression). Initial data from this study were presented at the at the 2016 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting. The data confirmed that CDX-1401 is effective at driving NY-ESO-1 immunity and further demonstrated the value of CDX-301 as a combination agent for enhancing tumor-specific immune response. Based on results to date, plans for additional studies are being considered, including a targeted study in NY-ESO-1 positive disease to determine if these enhanced immune responses can translate to improved clinical outcomes.

Additionally, Roswell Park Cancer Center is conducting an investigator sponsored study evaluating CDX-1401, poly-ICLC (Hiltonol) and the IDO1 inhibitor epacadostat (INCB24360) in patients in remission with ovarian, fallopian tube or primary peritoneal cancer. Patients’ tumors must have expressed NY-ESO-1 or the LAGE-1 antigen to be eligible for the study. Celldex is providing CDX-1401 and poly-ICLC in support of this study.
CDX-301 (recombinant human Flt3L), a potent hematopoietic cytokine that uniquely expands the number of dendritic cells to prime the immune system for more robust immune responses to cancer antigens

As outlined above, data were presented from the Phase 2 study of CDX-1401 and CDX-301 in metastatic melanoma that further demonstrated the value of CDX-301 as a combination agent for enhancing tumor-specific immune response. CDX-301 greatly expanded peripheral blood dendritic cells and was highly effective at increasing cancer antigen specific T cells and antibodies when combined with CDX-1401. These results, which also showed rapid cellular immune responses in a majority of patients, suggests that pre-treatment with CDX-301 could provide a highly applicable, effective immunologic approach.

CDX-301’s potential activity is also being explored in a Phase 1/2 study of CDX-301 and poly-ICLC in combination with low-dose radiotherapy in patients with low-grade B-cell lymphomas conducted by the Icahn School of Medicine at Mount Sinai.
CDX-014, an antibody-drug conjugate (ADC) targeting the transmembrane protein T-cell immunoglobulin mucin-1 (TIM-1) in renal cell carcinoma

In July 2016, Celldex announced that enrollment had opened in the Phase 1 dose-escalation portion of the Company’s Phase 1/2 study of CDX-014 in advanced clear cell and papillary renal cell carcinoma (RCC). The Phase 1 study will evaluate cohorts of patients receiving increasing doses of CDX-014 to determine the maximum tolerated dose and a recommended dose for Phase 2 study.
RINTEGA ("rindopepimut"; "rindo"; CDX-110), an EGFRvIII(v3)-specific therapeutic vaccine for glioblastoma (GBM)

As previously disclosed, in March, during a pre-planned interim analysis, the independent Data Safety and Monitoring Board (DSMB) recommended discontinuation of the Phase 3 ACT IV study of RINTEGA (rindopepimut) in patients (n=745) with newly diagnosed EGFRvIII-positive glioblastoma. Study closure activities are substantially complete, and Celldex continues to anticipate that the Company will not incur substantial additional costs related to RINTEGA at this time. Celldex is in the process of conducting a thorough review of the data and plans to present the ACT IV results at the Society for Neuro-Oncology Annual Meeting in November of 2016. All patients on the RINTEGA arm of the ACT IV study, prior Phase 2 studies and existing compassionate use recipients have been offered ongoing access to RINTEGA on a compassionate use basis.
Second Quarter and First Six Months 2016 Financial Highlights and Updated 2016 Guidance

Cash position: Cash, cash equivalents and marketable securities as of June 30, 2016 were $220.1 million compared to $254.0 million as of March 31, 2016. The decrease was primarily driven by our second quarter cash used in operating activities of $33.8 million, $5.9 million of which were RINTEGA-related payments. At June 30, 2016, Celldex had 99.4 million shares outstanding.

Revenues: Total revenue was $1.4 million in the second quarter of 2016 and $2.7 million for the six months ended June 30, 2016, compared to $2.2 million and $2.7 million for the comparable periods in 2015. Total revenue was primarily derived from our clinical trial collaboration with Bristol-Myers Squibb and our research and development agreement with Rockefeller University.

R&D Expenses: Research and development (R&D) expenses were $25.7 million in the second quarter of 2016 and $53.2 million for the six months ended June 30, 2016, compared to $26.5 million and $51.6 million for the comparable periods in 2015.

The decrease in R&D expenses of $0.8 million between the three-month periods was primarily due to lower clinical costs of $3.2 million, offset in part by increased contract manufacturing costs of $0.8 million and personnel costs of $1.6 million, including higher stock-based compensation of $0.8 million.

The increase in R&D expenses of $1.6 million between the six-month periods was primarily due to higher contract manufacturing and other contract service costs and personnel costs, including higher stock-based compensation of $1.3 million, offset by lower clinical costs.

G&A Expenses: General and administrative (G&A) expenses were $7.8 million in the second quarter of 2016 and $17.1 million for the six months ended June 30, 2016, compared to $8.2 million and $14.3 million for the comparable periods in 2015.

The decrease in G&A expenses of $0.4 million between the three-month periods was primarily due to lower commercial planning costs of $1.1 million, partially offset by higher stock-based compensation of $0.7 million.

The $2.8 million increase in G&A expenses between the six-month periods was primarily due to higher stock-based compensation of $1.8 million, facility costs and legal costs.

Net loss: Net loss was $32.0 million, or ($0.32) per share, for the second quarter of 2016 and $66.6 million, or ($0.67) per share, for the six months ended June 30, 2016, compared to a net loss of $32.4 million, or ($0.33) per share and $62.5 million, or ($0.65) per share for the comparable periods in 2015.

Financial Guidance: Celldex believes that the cash, cash equivalents and marketable securities at June 30, 2016 combined with the anticipated proceeds from future sales of our common stock under our $60 million sales agreement with Cantor Fitzgerald & Co. are sufficient to meet estimated working capital requirements and fund planned operations through 2018.