On May 9, 2017 VLP Therapeutics, LLC ("VLP"), a biotechnology company focusing on the research and development of therapeutic and preventative vaccines and antibody agents, reported that it completed a convertible note financing with an angel investor Dr. Tomy Kamada, through his investment firm TomyK Ltd., that supports technology startups which pioneer new markets and create new industries with their innovative technologies (Press release, VLP Therapeutics, MAY 9, 2017, View Source [SID1234519827]).

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

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

                  Schedule Your 30 min Free Demo!

"We are very pleased with Dr. Kamada’s investment in our company and the successful closing of this financing. His evaluation of and investment in our company affirms the progress we have made to date and the investment will help accelerate our cancer vaccine program, as we prepare for clinical trials," said VLP Therapeutics’ Chief Executive Officer Dr. Wataru Akahata. "The decision by Dr. Tomy Kamada to invest in our company is a testament to the potential of our platform technology, based on the immune checkpoint PD-1/PD-L1/PD-L2 inserted alphavirus. With this investment, combined with strong data we have obtained for our candidate vaccines, we will continue to focus on bringing safe, accessible and effective cancer vaccines to patients as quickly as possible," he continued. Dr. Kamada noted that, "The VLP Therapeutics’ i-αVLP approach presents a breakthrough method that is applicable to a wide range of vaccine developments. I am very pleased to support the i-αVLP vaccine development approach, especially as applied towards cancer vaccines, which has to be one of the most anticipated to therapies in the world."

About i-α VLP Technology

The human immune system is biologically designed to protect us against disease. The immune system detects foreign objects such as viruses, bacteria or abnormal self-tissues (like cancer cells) in the body, and not only tries to eliminate these foreign objects, but also "memorizes" them so it can protect the body from them in the future. Vaccines utilize the immune system to protect us from various diseases.

Traditional vaccines are made using live viruses, which, though rare, can cause serious safety risks. Unlike traditional vaccines, VLP’s novel, proprietary platform technology utilizes virus-like particles. Virus-like particles are identical to the authentic native viruses in their shapes, but do not carry the genetic material of native viruses. Without the genetic material, these particles cannot replicate themselves. This means that when the viruslike particles are presented within our bodies, our immune system will recognize the particles as foreign objects, triggering effective immune responses, but should not cause the risk of side effects associated with the native virus due to the absence of genetic material.

Utilizing these virus-like particles, VLP Therapeutics has developed a proprietary, "plug-and-play" platform called inserted alphavirus virus-like particle (i-αVLP) using the Chikungunya virus (CHIKV) VLP. Through this adaptable platform, foreign antigens can be inserted into two specific sites of the envelope protein on the surface of i-αVLP. With 240 copies of envelope protein per CHIKV VLP, each i-αVLP can display a tremendous 480 copies of an inserted antigen. This highly symmetrical, icosahedral dense array of antigens has been shown in our studies to induce very strong immune responses, resulting in its superior efficacy. VLP Therapeutics has established a method to efficiently produce i-αVLPs which it believes can be scaled for commercial production.

About VLP Therapeutics

VLP Therapeutics, LLC ("VLP") was established in 2012 by seasoned biopharmaceutical veterans with the mission to develop innovative medical treatments which can transform traditional vaccines and targeted antibody therapies to address global unmet medical needs. Its vision is to combat 21st century global public health problems through its revolutionary next generation i-αVLP technology platform. VLP is currently developing preventative and therapeutic vaccines as well as next generation targeted antibody agents to treat cancer, infectious diseases, such as Malaria, Dengue Fever and Zika virus-based diseases, autoimmune and neurological diseases.

About TomyK Ltd.

TomyK Ltd. supports technology startups which pioneer new markets and create new industries with their innovative technologies. Founder and CEO, Dr. Tomy Kamada, was a co-founder of ACCESS Co., Ltd. (listed in Tokyo Stock Exchange: 4813), a global software company for mobile and beyond-PC markets. Dr. Kamada received a Doctorate in 
Computer Science from the University of Tokyo. He is also renowned as an inventor of "Compact HTML"
for mobile phones, enabling successful mobile Internet services in the early days of the Internet. After retiring from ACCESS in 2012, Dr. Kamada founded TomyK Ltd. (View Source) to actively support young, innovative startups, including the areas of Robotics and AI, IoT (Internet of Things), Human Argumentation, Biotechnology, Medical & Life Science, and other frontier technologies.

On May 9, 2017 Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) (“Valeant” or the “Company” or “we”) reported first-quarter 2017 financial results (Filing, Q1, Valeant, 2017, MAY 9, 2017, View Source [SID1234519091]).

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

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

                  Schedule Your 30 min Free Demo!

“Our first quarter performance demonstrates that we are delivering on our commitments. We met our internal expectations, and we are continuing to make progress on our key initiatives, focus on the turnaround of our core businesses and improve internal operating efficiencies,” said Joseph C. Papa, chairman and chief executive officer, Valeant. “Our divestiture efforts and cash flow generation have led to a $3.6 billion reduction in total debt to date, since the end of the first quarter of 2016, and our successful debt refinancing provides us with a more comfortable maturity profile.”

First-Quarter 2017 Highlights

Strengthening the Balance Sheet
•
Delivered $954 million in cash flow from operations

1 | Page

g274847img1.jpg
International Headquarters
2150 St. Elzéar Blvd. West
Laval, Quebec H7L 4A8
Phone: 514.744.6792
Fax: 514.744.6272

•
Completed more than $1.3 billion in asset sales, including the earlier than expected closure of the sale of the CeraVe, AcneFree and AMBI skincare brands
•
On track to close the sale of Dendreon Pharmaceuticals for $819.9 million in cash proceeds in mid-year
•
Reduced debt of $1.3 billion in the first quarter of 2017; reduced total debt to date by $3.6 billion since the end of the first quarter of 2016
•
Successfully executed a debt refinancing that extended our debt maturity profile, increased our fixed vs. floating rate debt and increased covenant flexibility

Continued Focus on Core Business
•
Obtained approval for SILIQ (brodalumab) from the U.S. Food and Drug Administration (FDA) and announced it will be the most competitively priced injectable biologic for moderate-to-severe plaque psoriasis when it launches later this year
•
Advanced Bausch + Lomb business
◦
Received FDA 510(k) clearance for Vitesse
◦
Received FDA 510(k) clearance for Stellaris Elite
◦
Introduced Bausch + Lomb ULTRA for Astigmatism contact lenses
◦
Expanded parameters for Bausch + Lomb ULTRA for Presbyopia contact lenses
◦
Received FDA filing acceptance with Nicox S.A. for Vyzulta1 (latanoprostene bunod) for glaucoma with a PDUFA action date of August 24, 2017
◦
Received FDA filing acceptance for Luminesse1 (brimonidine tartrate ophthalmic solution, 0.025%) with a PDUFA action date of December 27, 2017
◦
Entered into an exclusive, worldwide licensing agreement for the EyeGate II Delivery System and EGP-437 combination product candidate for the treatment of post-operative pain and inflammation in ocular surgery patients
•
Stabilized average realized pricing within our dermatology business
•
Expanded Salix sales force to reach untapped market potential in primary care
•
Grew Bausch + Lomb Vision Care business in Australia, China and Japan, with notable 11% volume growth in China
•
Announced new skincare product line collaboration with Suzan Obagi, M.D., and Nextcell Medical Company
____________________________________
1 Provisional name

First-Quarter Revenue Performance

Total revenues were $2.109 billion for the first quarter of 2017 as compared to $2.372 billion in the first quarter of 2016, a decrease of $263 million, or 11%. The decline was primarily driven by lower volumes in our U.S. Diversified Products and Branded Rx segments as a result of the loss of exclusivity for a number of products and challenging market dynamics. Revenues were also negatively affected by foreign currencies, divestitures and discontinuations, and a modest decrease in average realized pricing. These decreases were partially offset by increased volumes in our Bausch + Lomb/International segment, mainly in Europe, the Middle East, South Africa, China and Australia.

2 | Page

g274847img1.jpg
International Headquarters
2150 St. Elzéar Blvd. West
Laval, Quebec H7L 4A8
Phone: 514.744.6792
Fax: 514.744.6272

Revenues by segment were as follows:

Three Months Ended March 31
(in millions)

2017

2016

Reported Change

Currency Impact

Constant Currency Change2
Segment Revenues

Bausch + Lomb/International

$
1,150

$
1,146

$
4

$
(41
)

$
45

Branded Rx

604

665

(61
)

–

(61
)
U.S. Diversified Products

355

561

(206
)

–

(206
)
Total revenues

$
2,109

$
2,372

$
(263
)

$
(41
)

$
(222
)
____________________________________
2 To assist investors in evaluating the Company’s performance, we have adjusted for foreign currency effects. Constant currency impact is determined by comparing 2017 reported amounts adjusted to exclude currency impact, calculated using 2016 monthly average exchange rates, to the actual 2016 reported amounts.

Bausch + Lomb/International Segment

The Bausch + Lomb/International segment revenues were $1.15 billion for the first quarter of 2017 as compared to $1.146 billion for first quarter of 2016, an increase of $4 million, or less than 1%. Growth was 4% on a constant currency basis. Gains were primarily driven by increases in our international volumes, particularly in Europe, the Middle East, South Africa, Asia and Australia, of $59 million, partially offset by declines in U.S. Bausch + Lomb volumes of $10 million. Average realized pricing across the segment increased $16 million mainly from the international business units. The U.S. Bausch + Lomb units saw average realized pricing increase by less than $1 million. Volume and pricing gains were partially offset by the unfavorable impact of foreign currencies of $41 million and the impact of divestitures and discontinuations of $21 million.

Branded Rx Segment

The Branded Rx segment revenues were $604 million for the first quarter of 2017 as compared to $665 million in the same period in 2016, a decrease of $61 million, or 9%. The decrease was primarily driven by decreased volumes in the dermatology and Salix business units due to the loss of exclusivity of certain product lines, continued generic competition and the impact of an increase in the prevalence of high deductible medical plans. The decrease in overall volume was partially offset by an increase in average realized prices across the segment. Pricing improved in the dermatology business, driven by lower customer subsidies and accommodations and higher wholesaler selling prices. In the Salix business, we benefited from higher wholesale selling prices and from favorable chargebacks during the quarter. These increases were partially offset by higher managed care rebates particularly in the dermatology business. Segment revenues were also impacted by $7 million as a result of the divestiture of Ruconest.

U.S. Diversified Products Segment

The U.S. Diversified Products segment reported first-quarter 2017 revenues of $355 million as compared to $561 million in the first quarter of 2016, reflecting a decline of $206 million, or 37%. The decrease was primarily driven by

3 | Page

g274847img1.jpg
International Headquarters
2150 St. Elzéar Blvd. West
Laval, Quebec H7L 4A8
Phone: 514.744.6792
Fax: 514.744.6272

a $157 million decrease in volume and lower average realized prices of $47 million. The declines in both volume and average realized price were primarily driven by loss of exclusivity for products in the segment.

GAAP Operating Income

Operating income was $211 million for the first quarter of 2017 as compared to $66 million for the first quarter of 2016, an increase of $145 million. The decrease in operating expenses includes higher direct-to-consumer advertising expenses for Jublia and Xifaxan in the first quarter of 2016, which was partially offset by a higher run rate in general and administrative (G&A) expenses and asset impairments.

GAAP Net Income (Loss)

Net income for the three months ended March 31, 2017 was $628 million as compared to a net loss of ($374) million for the same period in 2016, an increase of $1.002 billion. Net income in the first quarter of 2017 includes a one-time income tax benefit of $908 million from a non-cash internal restructuring that occurred during this time. In addition, net income included the loss on extinguishment of debt of $64 million associated with our debt refinancing and repurchases that occurred in the first quarter of 2017 and an increase in interest expense of $47 million, primarily from the increase in interest rates associated with amendments to our credit agreements in 2016.

Adjusted EBITDA (non-GAAP)

Adjusted EBITDA (non-GAAP) was $861 million for the first quarter of 2017 as compared to $1.008 billion for the first quarter of 2016, a decrease of $147 million, primarily due to the loss of exclusivity for products in the U.S. Diversified Products segment.

GAAP Earnings Per Share (EPS) – Diluted

GAAP EPS – Diluted for the first quarter of 2017 came in at $1.79 as compared to $(1.08) in the first quarter of 2016.

GAAP Cash Flow from Operations

Cash provided by operating activities was $954 million for the first quarter of 2017, attributable to changes in our working capital and cash we received from our fulfillment arrangement with Walgreens.

4 | Page

g274847img1.jpg
International Headquarters
2150 St. Elzéar Blvd. West
Laval, Quebec H7L 4A8
Phone: 514.744.6792
Fax: 514.744.6272

2017 Guidance

Valeant has raised guidance for 2017, as follows:

•
2017 Full-Year Adjusted EBITDA (non-GAAP) in the range of $3.60 – $3.75 billion from $3.55 – $3.70 billion

This guidance reflects the impact of the sale of the CeraVe, AcneFree and AMBI skincare brands. This guidance does not reflect the impact of the sale of the Dendreon business, which is expected to close mid-year.

Other than with respect to GAAP Revenues, the Company only provides guidance on a non-GAAP basis. The Company does not provide a reconciliation of forward-looking Adjusted EBITDA (non-GAAP) to GAAP net income (loss), due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. In periods where significant acquisitions or divestitures are not expected, the Company believes it might have a basis for forecasting the GAAP equivalent for certain costs, such as amortization, that would otherwise be treated as non-GAAP to calculate projected GAAP net income (loss). However, because other deductions (such as restructuring, gain or loss on extinguishment of debt and litigation and other matters) used to calculate projected net income (loss) vary dramatically based on actual events, the Company is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income (loss) at this time. The amounts of these deductions may be material and, therefore, could result in projected GAAP net income (loss) being materially less than projected Adjusted EBITDA (non-GAAP). As previously discussed, the Company is no longer providing guidance with respect to Adjusted Net Income or Adjusted EPS.

Reducing and Refinancing Debt

In the first quarter of 2017, we successfully executed a debt refinancing that extended our debt maturity profile, increased our fixed vs. floating rate debt and increased flexibility under our debt covenants. During the quarter, the Company reduced its outstanding debt by $1.3 billion.

These transactions and debt payments have had the effect of lowering our cash requirements for principal debt payments over the remainder of 2017 through 2020 by an aggregate $6.32 billion, providing us with a much improved liquidity profile during this timeframe and greater flexibility to execute our business plans. In April 2017, we announced that we reduced our term loans under our Senior Secured Credit Facilities by approximately an additional $220 million.

Valeant’s corporate credit ratings remained unchanged during the first quarter of 2017. The Company’s availability under the Revolving Credit Facility was approximately $925 million at March 31, 2017.

Other Matters

•
The Company’s cash and cash equivalents were $1.210 billion at March 31, 2017.
•
Richard DeSchutter, prior chairman and chief executive officer of DuPont Pharmaceuticals Company, joined the Valeant Board of Directors.

On May 10, 2017 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 March 31, 2017 (Press release, Fortress Biotech, MAY 9, 2017, View Source [SID1234519030]).

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

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

                  Schedule Your 30 min Free Demo!

Dr. Lindsay A. Rosenwald, Fortress’ Chairman, President and Chief Executive Officer, said, "Fortress had a strong start to 2017, with the launch of our subsidiaries Caelum Biosciences and Cyprium Therapeutics, which we believe strengthens our rare disease portfolio. Importantly, we announced a Cooperative Research and Development Agreement between Cyprium and the NICHD to advance the clinical development of Cyprium’s Phase 3 candidate CUTX ‐ 101 in Menkes disease, a rare and devastating pediatric illness. We also reported that Caelum announced the dosing of the final patient in its Phase 1b study of CAEL ‐ 101 for the treatment of AL amyloidosis, a fatal orphan disease that affects organ function. In addition, our established subsidiaries continued to deliver on key milestones, including Mustang Bio raising a total of approximately $95.0 million in private placement financings to support its CAR T pipeline. We look forward to the continued clinical advancement of our Fortress Companies, and are evaluating opportunities to expand our portfolio through compelling new indications and in ‐ licensing opportunities." Financial Results:  As of March 31, 2017, Fortress’ consolidated cash and cash equivalents totaled $134.0 million compared to $88.3 million at December 31, 2016, an increase of $45.7 million for the quarter. These totals exclude restricted cash of $15.9 million and cash deposits with clearing organizations of $1.0 million.  Net revenue totaled $44.7 million for the first quarter of 2017, compared to $0.7 million for the first quarter of 2016. Net total revenue as of March 31, 2017 includes $2.8 million of Fortress revenue and $41.9 million of revenue from National Holdings Corporation ("National"), which we acquired in September 2016, with no revenue attributable to National prior to the acquisition.  Research and development expenses were $7.1 million for the first quarter of 2017, of which $6.0 million was related to Fortress Companies. This compares to $7.7 million for the first quarter of 2016, of which $6.0 million was related to Fortress Companies. Non ‐ cash stock ‐ based compensation expenses included in research and development were $0.8 million for the first quarter of 2017, and $1.3 million for the first quarter of 2016.  Research and development expenses from license acquisitions totaled $1.3 million for the first quarter of 2017, compared to $0.1 million for the first quarter of 2016.  General and administrative expenses were $10.3 million for the first quarter of 2017, of which $7.1 million was related to Fortress Companies. This compares to $7.9 million for the first quarter of 2016, of which $4.0 million was related to Fortress Companies. Non ‐ cash stock ‐ based compensation expenses included in general and administrative expenses were $2.1 million for the first quarter of 2017, and $1.6 million for the first quarter of 2016.  National’s operating expenses totaled $43.1 million for the first quarter of 2017, with no expenses attributable to National prior to our acquisition of the company in September 2016.  Net loss attributable to common stockholders was $12.0 million, or $0.30 per share, for the first quarter of 2017, compared to a net loss attributable to common stockholders of $12.2 million, or $0.31 per share, for the first quarter of 2016. Recent Fortress Biotech and Fortress Company Highlights: Fortress Biotech, Inc.  Fortress recently launched two new Fortress Companies: Caelum Biosciences to develop therapies for amyloid light chain ("AL") amyloidosis, and Cyprium Therapeutics to develop novel therapies for the treatment of Menkes disease and related copper metabolism disorders.
Avenue Therapeutics, Inc.
In February 2017, two continuation patents covering methods of administration for intravenous tramadol for the treatment of acute pain were issued by the U.S. Patent and Trademark Office ("USPTO").
Caelum Biosciences, Inc.
In January 2017, Michael Spector was appointed Chief Executive Officer and a member of the Board of Directors of Caelum.
In January 2017, Caelum entered into an agreement with Columbia University ("Columbia") to secure exclusive worldwide license rights to CAEL ‐ 101, a chimeric fibril ‐ reactive monoclonal antibody.
In April 2017, the U.S. Department of Health & Human Services confirmed the transfer of two U.S. Food and Drug Administration ("FDA") Orphan Drug Designations for CAEL ‐ 101 from Columbia to Caelum. The designations cover use as a therapeutic agent for patients with AL amyloidosis and use as a radio ‐ imaging agent in amyloidosis.
In May 2017, Columbia dosed the final patient in the Phase 1b trial of CAEL ‐ 101. Preliminary Phase 1b data are expected mid ‐ 2017, with full data anticipated by the end of the year.
Checkpoint Therapeutics, Inc.
In February 2017, the USPTO issued a composition of matter patent for CK ‐ 101, an oral, third ‐ generation epidermal growth factor receptor ("EGFR") inhibitor in development for the treatment of EGFR mutation ‐ positive non ‐ small cell lung cancer.
In April 2017, preclinical data on CK ‐ 101 and anti ‐ programmed cell death ligand ‐ 1 ("PD ‐ L1") antibody, CK ‐ 301, were presented in poster sessions at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting.
Cyprium Therapeutics, Inc.
In March 2017, Lung Yam, M.D., Ph.D., was appointed Chief Executive Officer and a member of the Board of Directors of Cyprium.
In March 2017, Cyprium entered into a Cooperative Research and Development Agreement ("CRADA") with the Eunice Kennedy Shriver National Institute of Child Health and Human Development ("NICHD"), part of the National Institutes of Health ("NIH"), to advance the clinical development of Phase 3 candidate CUTX ‐ 101 (Copper Histidinate injection) for the treatment of Menkes disease.
Also effective in March 2017, Cyprium and the NICHD entered into a worldwide, exclusive license agreement to develop and commercialize the adeno ‐ associated virus ("AAV") ‐ based gene therapy AAV ‐ ATP7A to deliver working copies of the copper transporter that is defective in Menkes patients. AAV ‐ ATP7A will be used in combination with CUTX ‐ 101.
Mustang Bio, Inc.
From October 2016 to March 2017, Mustang closed on a total of approximately $95.0 million in private placement financings, prior to fees and expenses.
In April 2017, Mustang appointed Manuel Litchman, M.D., as President and Chief Executive Officer, as well as a member of the Board of Directors

On May 9, 2017 Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) reported financial results for the three months ended March 31, 2017, and provided an operating forecast and program updates (Filing, Q1, Ligand, 2017, MAY 9, 2017, View Source [SID1234519019]). Ligand management will host a conference call today beginning at 4:30 p.m. Eastern time.

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

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

                  Schedule Your 30 min Free Demo!

"We are pleased to be reporting a substantial increase in first quarter royalty revenue led by Promacta, Kyprolis and EVOMELA, as well as strong cash flow from operations. In addition to achieving solid sales growth, our partners made important clinical, regulatory and commercial progress on a global basis," said John Higgins, Chief Executive Officer. "During the first quarter we completed enrollment in a Phase 2 clinical trial with our novel, small-molecule GRA program for the treatment of type 2 diabetes mellitus, and we look forward to reporting topline results this September. We also added to our Shots-on-Goal business model with new licensing agreements including those for OmniAb and Captisol."

First Quarter 2017 Financial Results

Total revenues for the first quarter of 2017 were $29.3 million, compared with $29.6 million for the same period in 2016. Royalties were $24.2 million, compared with $14.4 million for the same period in 2016, an increase of 68%, primarily due to higher royalties from Promacta and Kyprolis and new royalties from EVOMELA this period, compared to a year ago. Material sales were $1.1 million, compared with $5.3 million for the same period in 2016 due to timing of Captisol purchases for use in clinical trials and commercial products. License fees, milestones and other revenues were $3.9 million, compared with $9.9 million for the same period in 2016, which included receipt of a $6.0 million approval milestone for EVOMELA.

Cost of goods sold was $0.3 million for the first quarter of 2017, compared with $1.0 million for the same period in 2016 due to the timing and mix of Captisol sales. Amortization of intangibles was $2.7 million, compared with $2.5 million for the same period in 2016. Research and development expense was $8.7 million, compared with $4.0 million for the same period of 2016 due to enrollment costs of our Phase 2 GRA trial and non-cash stock-based compensation expense. General and administrative expense was $7.3 million, compared with $7.1 million for the same period in 2016.

Net income for the first quarter of 2017 was $5.1 million, or $0.22 per diluted share, compared with $6.6 million, or $0.30 per diluted share for the same period in 2016. Adjusted net income for the first quarter of 2017 was $12.6 million, or $0.57 per diluted share, compared with $13.6 million, or $0.63 per diluted share for the same period in 2016.


As of March 31, 2017, Ligand had cash, cash equivalents and short-term investments of $159.4 million. Cash generated from operations was $24.2 million for the 2017 first quarter.

2017 Financial Forecast

The Company expects 2017 revenues to consist of three components: royalties, material sales and contract (license and milestone) revenue. Ligand affirms previous guidance of 2017 core revenue to include royalties of approximately $87 million, material sales of approximately $23 million and contract payments of at least $20 million. During 2017, Ligand estimates it could potentially receive up to an additional $24 million of contract payments; however, external events are out of Ligand’s control so the Company will provide more information about the timing and probability for additional contract revenue, if any, expected to be booked in 2017 as the year progresses. Ligand notes that with core revenue of $130 million, adjusted earnings per diluted share would be approximately $2.70. This amount is expected to be higher in the event additional contract revenue is received in 2017.

First Quarter 2017 and Recent Business Highlights

Portfolio Program Progress

Promacta/Revolade

•
Novartis reported first quarter 2017 net sales of Promacta/Revolade (eltrombopag) of $175 million, a $44 million or 34% increase over the same period in 2016.
•
Novartis reported Revolade (eltrombopag) was approved in Canada for the treatment of pediatric (≥1 years to <18 years) chronic immune thrombocytopenia purpura to increase platelet counts in patients who have had an insufficient response to corticosteroids or immunoglobulins.
•
Novartis announced the publication of a study conducted by the National Institutes of Health demonstrating that 58% of patients with treatment-naïve severe aplastic anemia achieved complete response at six months when treated with eltrombopag at the initiation of and concurrent with standard immunosuppressive treatment. The data are published in the latest issue of The New England Journal of Medicine.

Kyprolis (carfilzomib), an Amgen Product Utilizing Captisol

•
On April 26, 2017, Amgen reported first quarter 2017 net sales of Kyprolis (carfilzomib) of $190 million, a $36 million or 23% increase over the same period in 2016.
•
On February 28, 2017, Amgen announced positive results from a planned overall survival (OS) interim analysis of the Phase 3 head-to-head ENDEAVOR trial. The study met the key secondary endpoint of OS, demonstrating that patients with relapsed or refractory multiple myeloma treated with Kyprolis (carfilzomib) and dexamethasone (Kd) lived 7.6 months longer than those treated with Velcade (bortezomib) and dexamethasone (Vd) (median OS 47.6 months for Kd versus 40.0 for Vd, HR = 0.79, 95 percent CI, 0.65 – 0.96).
•
On March 1, 2017, Amgen announced that new data from the Kyprolis (carfilzomib) clinical development program would be presented at the 16th International Myeloma Workshop, March 1-4, 2017, in New Delhi.

Additional Pipeline and Partner Developments

•
Melinta Therapeutics announced that the new drug applications (NDAs) for IV and oral Baxdela (delafloxacin) for the treatment of patients with acute bacterial skin and skin structure infections (ABSSSI) were accepted for filing by the Food and Drug Administration (FDA) and were granted a Prescription Drug User Fee Act (PDUFA) date of June 19, 2017. Additionally, Melinta announced that the FDA does not plan to hold an Advisory Committee meeting for the NDAs. If approved, Ligand is entitled to receive a 2.5% royalty on net sales of the IV formulation of Baxdela and a $1.5 million approval milestone payment.
•
Melinta Therapeutics announced signing a development and commercialization agreement with Menarini Group, granting Menarini exclusive rights to commercialize delafloxacin under its own brands in 68 countries in Europe, Asia-Pacific including China, South Korea and Australia (excluding Japan), and the Commonwealth of Independent States including Russia.




•
Retrophin announced plans to initiate a single Phase 3 clinical trial to enable an NDA filing for sparsentan for the treatment of focal segmental glomerulosclerosis. The trial will include an interim analysis of proteinuria as a surrogate endpoint to serve as the basis for an NDA filing for Subpart H accelerated approval of sparsentan. Retrophin expects to initiate the trial in the second half of 2017.
•
Sage Therapeutics presented brexanolone data at the American Academy of Neurology 2017 annual meeting.
•
Aldeyra provided an update on its Phase 3 clinical program of ADX-102 in noninfectious anterior uveitis and anticipates beginning the Phase 3 trial in the second quarter of 2017.
•
Aldeyra announced the last patient had completed dosing in Aldeyra’s multicenter, double-blind, randomized Phase 2b clinical trial of ADX-102 in allergic conjunctivitis.
•
Biocad announced receiving marketing authorization from the Ministry of Health of the Russian Federation for its interferon beta-1a biosimilar of Merck’s Rebif.
•
Merck announced it stopped the Phase 2/3 EPOCH study evaluating verubecestat in people with mild-to-moderate Alzheimer’s disease due to the conclusion that the efficacy endpoint could not be achieved. No safety concerns were noted. Results from EPOCH will be analyzed and presented at an upcoming scientific meeting. The external Data Monitoring Committee recommended that the ongoing Phase 3 APECS study, which is evaluating verubecestat in people with prodromal Alzheimer’s disease, continue unchanged. Results from the APECS study are expected in February 2019.
•
Novartis announced that it had exercised an option to in-license ECF843 (Lubricin) for ophthalmic indications from Lubris Biopharma. Ligand acquired economic rights to the Lubricin program from Selexis, SA in 2015.
•
Opthea Limited announced positive results from its Phase 1/2a clinical trial of OPT-302 for wet age-related macular degeneration (wet AMD). Opthea is planning to initiate a Phase 2b trial in wet AMD and a Phase 2a trial in diabetic macular edema in the second half of 2017.
•
Viking Therapeutics announced positive initial results from a proof-of-concept study of VK2809 in an in vivo model of glycogen storage disease 1a (GSD 1a) and announced funding of initial clinical development of VK2809 for treatment of GSD 1a with plans to file an investigational new drug (IND) application in the second half of 2017.
•
Janssen filed an IND application for an antibody discovered using Ligand’s OmniAb technology. The IND filing resulted in a $1 million milestone payment to Ligand. Janssen has a royalty-free license to the OmniAb technology (entered into with OMT in October of 2013), but will potentially pay Ligand further development and commercial milestones upon clinical success and regulatory approval of any therapeutic developed using the OmniAb technology.
•
Marinus Pharmaceuticals presented Phase 1 clinical data showing the safety and tolerability of ganaxolone IV at the 6th London-Innsbruck Colloquium on Status Epilepticus and Acute Seizures.
•
Merck KGaA announced it licensed rights to develop Captisol-enabled VX-970 from Vertex Pharmaceuticals. Economic terms of the original agreement between Ligand and Vertex remained unchanged.
•
XTL Biopharmaceuticals announced the receipt of additional preclinical data regarding the role of hCDR1 as a potential treatment for Sjögren’s syndrome from Prof. Edna Mozes of The Weizmann Institute of Science and the developer of hCDR1.

New Licensing Deals

•
Ligand announced a worldwide platform license agreement with bluebird bio, Inc. Under the license, bluebird will be able to use the OmniRat, OmniMouse and OmniFlic platforms to discover fully human mono- and bispecific antibodies and antibody fragments. Ligand is eligible to receive annual platform access payments, development milestone payments and royalties for each product incorporating an OmniAb antibody. Bluebird will be responsible for all costs related to the programs. Ligand previously disclosed rights to a single-antibody partnership had been licensed to bluebird, but this new agreement gives bluebird full access to the OmniAb platform.
•
Ligand announced an expansion of its license with Sermonix Pharmaceuticals to include worldwide rights to develop and commercialize oral lasofoxifene. Ligand originally licensed U.S. rights to oral lasofoxifene to Sermonix in February of 2015, and has now expanded the agreement to include the rest of the world. Ligand is entitled to commercial milestones and royalties on net sales ranging from 6-10% upon commercialization of oral lasofoxifene.

•
Ligand announced a commercial license and supply agreement with Marinus Pharmaceuticals granting rights to use Captisol in the formulation of IV ganaxolone. Ligand is entitled to milestone payments, royalties and revenue from Captisol material sales related to IV ganaxolone.
•
Ligand entered into a Captisol Clinical Use/Supply Agreement with Eisai.

Internal Glucagon Receptor Antagonist (GRA) Program

•
Ligand announced the completion of enrollment in the Company’s Phase 2 clinical trial with its novel, small-molecule GRA program (LGD-6972) for the treatment of type 2 diabetes mellitus. The Company expects to report topline results in September 2017.

Adjusted Financial Measures

The Company reports adjusted net income and adjusted net income per diluted share, in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company’s financial measures under GAAP include stock-based compensation expense, amortization of debt-related costs, amortization related to acquisitions, changes in contingent liabilities, net losses of Viking Therapeutics, mark-to-market adjustment for amounts owed to licensors, fair value adjustments to Viking Therapeutics convertible note receivable and warrants, unissued shares relating to the Senior Convertible Note, and others that are listed in the itemized reconciliations between GAAP and adjusted financial measures included in this press release. However, other than with respect to total revenue, the Company only provides guidance on an adjusted basis and does not provide reconciliations of such forward-looking adjusted measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for changes in contingent liabilities, net losses of Viking Therapeutics, mark-to-market adjustments for amounts owed to licensors, effects of any discrete income tax items and fair value adjustments to Viking Therapeutics convertible note receivable. Management has excluded the effects of these items in its adjusted measures to assist investors in analyzing and assessing the Company’s past and future core operating performance. Additionally, adjusted earnings per diluted share is a key component of the financial metrics utilized by the Company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation.