On November 3, 2016 Geron Corporation (Nasdaq:GERN) reported financial results for the three and nine months ended September 30, 2016 and recent events (Press release, Geron, NOV 3, 2016, View Source;p=RssLanding&cat=news&id=2219487 [SID1234516274]).

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For the third quarter of 2016, the company reported a net loss of $3.6 million, or $(0.02) per share, compared to net income for the third quarter of 2015 of $27.2 million, or $0.17 per share. Net loss for the first nine months of 2016 was $21.1 million, or $(0.13) per share, compared to net income for the first nine months of 2015 of $8.5 million, or $0.05 per share. The company ended the third quarter of 2016 with $129.8 million in cash and investments and has not incurred any impairment charges on its marketable securities portfolio.

Revenues for the three and nine months ended September 30, 2016 were $5.1 million and $6.1 million, respectively, compared to $35.4 million and $36.2 million for the comparable 2015 periods. Revenues for the three and nine month periods ending September 30, 2016 included license fee revenue of $5.0 million in connection with an upfront payment due under a license agreement signed in September 2016 with Janssen Pharmaceuticals, Inc. for certain rights to specialized oligonucleotide backbone chemistry and novel amidates. Revenues for the three and nine month periods ending September 30, 2015 included the full recognition of the $35.0 million upfront payment from Janssen Biotech, Inc. (Janssen) as collaboration revenue upon the company’s transfer of the imetelstat license rights and completion of technology transfer-related activities outlined under the imetelstat collaboration agreement with Janssen. The upfront cash payment was received in December 2014 and recorded as deferred revenue at that time.

Total operating expenses for the three and nine months ended September 30, 2016 were $9.0 million and $27.9 million, respectively, compared to $8.3 million and $28.1 million for the comparable 2015 periods. Research and development expenses for the three and nine months ended September 30, 2016 were $4.3 million and $13.9 million, respectively, compared to $4.1 million and $13.8 million for the comparable 2015 periods. General and administrative expenses for the three and nine months ended September 30, 2016 were $4.7 million and $14.0 million, respectively, compared to $4.3 million and $12.9 million for the comparable 2015 periods. Year-to-date operating expenses for 2015 also included restructuring charges of $1.3 million in connection with the company’s organizational resizing announced in March 2015.

The increase in research and development expenses for the three and nine month periods ending September 30, 2016, compared to the same periods in 2015, primarily reflected the net result of higher costs for the company’s proportionate share of clinical development expenses under the imetelstat collaboration with Janssen, partially offset by reduced personnel-related costs resulting from the March 2015 organizational resizing and lower costs for the manufacturing of imetelstat drug product. The company expects research and development expenses to be higher in 2016 compared to 2015 as the clinical development of imetelstat continues in collaboration with Janssen. The increase in general and administrative expenses for the three and nine month periods ending September 30, 2016, compared to the same periods in 2015, primarily reflected higher non-cash stock-based compensation expense and an increased allocation of facilities and other overhead costs to general and administrative activities.

Interest and other income for the three and nine months ended September 30, 2016 was $322,000 and $871,000, respectively, compared to $187,000 and $481,000 for the comparable 2015 periods. The increase in interest and other income for the three and nine month periods ending September 30, 2016, compared to the same periods in 2015, primarily reflected higher yields on the company’s marketable securities portfolio.

Recent Company Events

In the third quarter of 2016, Janssen conducted planned internal reviews of initial data from IMbarkTM and IMergeTM, the ongoing clinical trials of imetelstat.

IMbarkTM was designed to evaluate two dose levels of imetelstat (either 4.7 mg/kg or 9.4 mg/kg administered every three weeks) in approximately 200 patients (approximately 100 patients per dosing arm) with Intermediate-2 or High risk myelofibrosis (MF) who have relapsed after or are refractory to prior treatment with a JAK inhibitor. The co-primary efficacy endpoints for the trial are spleen response rate and symptom response rate at 24 weeks.

Janssen’s review included data from 20 patients from each dosing arm who had been followed on the trial for at least 12 weeks. In this review, no new safety signals were identified and the safety profile was consistent with previous imetelstat clinical trials in hematologic myeloid malignancies. Activity in the 4.7 mg/kg dosing arm did not warrant further investigation of that dose, and this arm has been closed to new patient enrollment. In the 9.4 mg/kg dosing arm, even though at the week 12 data assessment an insufficient number of patients met the protocol defined interim criteria, this arm warranted further investigation because encouraging trends in the efficacy data were observed. New enrollment in the 9.4 mg/kg arm has been suspended while the trial continues in order to obtain additional and more mature data that includes a longer follow-up of these patients at 24 weeks.

Enrolled patients in both arms are permitted to continue to receive imetelstat. Janssen has submitted a protocol amendment to health authorities that includes allowing eligible patients in the 4.7 mg/kg dosing arm to increase their dose to 9.4 mg/kg per investigator discretion.

IMergeTM is a two-part clinical study in patients with Low or Intermediate-1 risk myelodysplastic syndromes (MDS). Part 1 is a Phase 2, open-label, single-arm design in approximately 30 patients, which has been fully enrolled, and Part 2 is a Phase 3, randomized, double-blind, placebo-controlled design in approximately 170 patients. Janssen’s review of data in a subset of patients in Part 1 indicated that emerging safety and efficacy in IMergeTM is consistent with data reported from the pilot study conducted at Mayo Clinic in MDS patients. The primary efficacy endpoint for the trial is 8-week transfusion independence. IMergeTM continues unmodified at this time.

Second internal data reviews of additional and more mature data from both trials are planned by the end of the second quarter of 2017.

Three abstracts describing non-clinical data on imetelstat were accepted for presentation at the 58th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition to be held in San Diego, California from December 3-6, 2016. The abstracts were published on November 3, 2016 on the ASH (Free ASH Whitepaper) website at www.hematology.org.

On November 3, 2016 Five Prime Therapeutics, Inc. (Nasdaq:FPRX), a clinical-stage biotechnology company focused on discovering and developing innovative immuno-oncology protein therapeutics, reported a corporate update and reported financial results for the third quarter ended September 30, 2016 (Press release, Five Prime Therapeutics, NOV 3, 2016, View Source [SID1234516271]).

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"We have continued to make progress on all of our clinical and preclinical programs during the quarter," said Lewis T. "Rusty" Williams, M.D., Ph.D., president and chief executive officer of Five Prime. "We achieved an important milestone by advancing into the Phase 1b portion of our clinical trial evaluating the immunotherapy combination of cabiralizumab (FPA008) with nivolumab in multiple tumor types. We believe targeting both the CSF1R and PD-1 pathways has the potential to produce a synergistic therapeutic effect. Our Phase 1 trial evaluating FPA144 in patients with gastric cancer is also progressing well. We have added cohorts to enroll gastric cancer patients with tumors at varying levels of FGFR2b expression as well as a cohort to evaluate bladder tumors that overexpress FGFR2b. Additionally, we continue to advance our pre-clinical programs and have begun IND-enabling activities for three of our immuno-oncology therapeutic candidates."

Business Highlights and Recent Developments

Clinical Pipeline:

Cabiralizumab (FPA008): an investigational antibody that inhibits CSF1R and has been shown to block the activation and survival of monocytes and macrophages. In the setting of advanced cancer, tumor-associated macrophages can inhibit the immune system’s ability to eradicate the disease. In pigmented villonodular synovitis (PVNS), a CSF-1-driven tumor, the bulk of the tumor mass in joints is formed by the macrophages themselves. Five Prime and Bristol-Myers Squibb (BMS) have an exclusive worldwide collaboration agreement for the development and commercialization of cabiralizumab for these and potentially additional indications.

Initiated Phase 1b portion of cabiralizumab/OPDIVO trial.
In October 2016, Five Prime initiated the Phase 1b portion of the clinical trial evaluating the immunotherapy combination of cabiralizumab with the PD-1 immune checkpoint inhibitor OPDIVO (nivolumab) in multiple tumor types. Five Prime and BMS are evaluating the safety, tolerability and preliminary efficacy of the combination in advanced solid tumors, including non-small cell lung cancer, squamous cell carcinoma of the head and neck, pancreatic cancer, glioblastoma, renal cell carcinoma and ovarian cancer. The Phase 1a/1b trial is expected to enroll approximately 280 patients.

Advanced the Phase 2 trial of cabiralizumab in patients with PVNS.
Five Prime continued enrollment and dosing in the Phase 2 trial of cabiralizumab in PVNS. During Phase 2, Five Prime is evaluating clinical measures, including response rate, pain and range of motion, in approximately 30 PVNS patients.

FPA144: an isoform-selective antibody in development as a targeted immuno-therapy for tumors that overexpress FGFR2b, a splice variant of a receptor for some members of the fibroblast growth factor (FGF) family. FPA144 has been engineered for enhanced antibody-dependent cell-mediated cytotoxicity (ADCC) to increase direct tumor cell killing by recruiting natural killer (NK) cells. Five Prime retains global development and commercialization rights to FPA144.

Opened new gastric cancer cohorts and added a bladder cancer cohort in Phase 1 monotherapy trial of FPA144. Enrollment continues in the expansion portion of the trial evaluating the safety, PK and efficacy of biweekly 15 mg/kg infusions of FPA144 in patients with gastric cancer whose tumors highly overexpress FGFR2b. During the quarter, Five Prime added cohorts to evaluate FPA144 in patients with bladder cancer whose tumors overexpress FGFR2b and in patients with gastric cancer whose tumors express moderate or low levels of FGFR2b. Five Prime reported encouraging initial single-agent efficacy and safety data at the 2016 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting.

Announced FDA Orphan Drug Designation for FPA144 in July for the treatment of gastric cancer and cancer of the gastroesophageal junction in patients whose tumors overexpress FGFR2b.

FP-1039: a protein drug designed to intervene in FGF signaling. As a ligand trap, FP-1039 binds to and neutralizes FGF ligands (such as FGF2), preventing these signaling proteins from reaching FGFR1 on the surface of tumor cells.

Although Five Prime regained full rights to FP-1039 from GlaxoSmithKline (GSK) in September, GSK will complete the ongoing Phase 1b trial combining FP-1039 with first-line pemetrexed and cisplatin in untreated, unresectable mesothelioma. GSK concluded trial recruitment with 25 patients enrolled at the 15 mg/kg dose, and continues to dose and follow patients. Five Prime plans to make decisions on potential future development of FP-1039 in mesothelioma once objective response rate, disease control rate and progression-free survival data are sufficiently mature.
Preclinical Research and Development:

IND-enabling studies initiated for preclinical development candidates. Five Prime advanced multiple preclinical immuno-oncology programs and initiated IND-enabling activities for three therapeutic candidates. In vivo data from preclinical studies of Five Prime’s tetravalent GITR agonist antibody (FPA154) have been accepted for presentation in a poster at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) Annual Meeting on November 11, 2016. Five Prime intends to share further details on all three programs during its R&D Day in New York City on December 8. The company’s goal is to file at least one IND application for a new molecule each year for the foreseeable future, beginning in 2017.

Completed multiple immuno-oncology research screens to identify new targets and drug candidates. Five Prime’s research team completed functional screens on CD8 T cells and regulatory T cells, as well as a comprehensive screen of all extracellular binding interactions in the "immunome," a defined subset of extracellular proteins selectively expressed on immune cells. The screens were conducted in order to identify new immuno-oncology targets, which the company is prioritizing for further development as new drug candidates, either as monotherapies or as part of combination regimens.
Summary of Financial Results and Guidance:

Cash Position. Cash, cash equivalents and marketable securities totaled $440.7 million on September 30, 2016, compared to $517.5 million on December 31, 2015. The decrease in cash was primarily attributable to cash used in operations to advance the FPA144 clinical trial, preclinical programs and tax payments.
Revenue. Collaboration revenue for the third quarter of 2016 increased by $0.8 million to $6.7 million from $5.9 million in the third quarter of 2015. This increase was primarily due to revenue recognized under the 2015 cabiralizumab collaboration agreement with BMS, under which Five Prime is reimbursed for the expenses from the cabiralizumab immuno-oncology trial.
R&D Expenses. Research and development expenses for the third quarter of 2016 decreased by $0.8 million to $23.9 million from $24.7 million in the third quarter of 2015. In the third quarter of 2015, the company recorded an $8.0 million expense related to in-licensing. Adjusted for this expense, research and development expenses increased $7.2 million over the prior year’s quarter, primarily related to advancing the FPA144 clinical trial, preclinical development and immuno-oncology research programs.
G&A Expenses. General and administrative expenses for the third quarter of 2016 increased by $3.9 million to $9.1 million from $5.2 million in the third quarter of 2015. This increase was primarily due to increases in payroll and stock-based compensation expenses.
Net Loss. Net loss for the third quarter of 2016 was $19.4 million, or $0.72 per basic and diluted share, compared to a net loss of $24.0 million, or $0.93 per basic and diluted share, for the third quarter of 2015.
Shares Outstanding. Total shares outstanding were 28.4 million as of September 30, 2016.
Cash Guidance. Five Prime continues to expect full-year 2016 net cash used in operating activities to be less than $120 million, comprising less than $90 million used in operations and less than $30 million used for tax payments. The company estimates ending 2016 with more than $400 million in cash, cash equivalents and marketable securities.

On November 3, 2016 Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS), a clinical-stage biopharmaceutical company focused on the development and commercialization of novel immuno-oncology therapies, reported financial results for the third quarter and nine months ended September 30, 2016 and provided a business update (Press release, Corvus Pharmaceuticals, NOV 3, 2016, View Source;p=RssLanding&cat=news&id=2219512 [SID1234516268]).

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"We continue to make good progress on the development of our lead product candidate, CPI-444," said Richard A. Miller, M.D., co-founder, president and chief executive officer of Corvus. "Enrollment in the dose-selection stage of our Phase 1/1b trial with CPI-444 is complete and we are now enrolling patients in the expansion cohort stage of the trial, which is open in 35 sites in the U.S., Canada and Australia. In addition, we reported data on CPI-444 at two recent scientific meetings."

RECENT BUSINESS PROGRESS
CPI-444 Program

Completed enrollment of 48 patients in four cohorts in the dose-selection part of the Phase 1/1b trial for the Company’s lead oral checkpoint inhibitor, CPI-444, as a single agent and in combination with Genentech’s TECENTRIQ (atezolizumab), an anti-PD-L1 antibody.
Selected an oral dose of 100 mg twice daily for 28 days for both the single agent and combination arms of the disease-specific expansion cohort stage of the trial, which is now enrolling.
Presented preclinical and preliminary biomarker data at the Second CRI-CIMT-EATI-AACR International Cancer Immunotherapy Conference (CIMT) (Free CIMT Whitepaper) in September, which showed that CPI-444 is well tolerated and that single agent treatment is associated with activation of T-cells detected in the blood. Corvus believes this is the first demonstration of immune modulation in cancer patients receiving an adenosine antagonist.
Presented additional biomarker data from the Phase 1/1b study showing continued evidence of treatment-related immune activation at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress in October. CPI-444 continued to be generally well tolerated, with one patient experiencing a possibly drug related serious adverse event.
Other Product Candidates

Demonstrated in preclinical studies that Corvus’ anti-CD73 antibody directly inhibited catalytic activity of CD73 and was differentiated from other competitive CD73 antibodies. Large scale manufacturing of anti-CD73 is in progress and IND enabling studies have been initiated.
Selected a lead compound for Corvus’ interleukin-2 (IL-2)-inducible T-cell kinase (ITK) inhibitor program and initiated IND enabling studies.
UPCOMING MILESTONE

The Company expects to present preliminary efficacy data from the dose-selection part of the Phase 1/1b trial for CPI-444 in the fourth quarter of 2016.
THIRD QUARTER 2016 FINANCIAL RESULTS
At September 30, 2016, Corvus had cash, cash equivalents and marketable securities totaling $145.1 million. This compared to cash, cash equivalents and marketable securities of $94.4 million at December 31, 2015.

Research and development expenses for the three months ended September 30, 2016 totaled $7.7 million, an increase of $5.2 million from $2.5 million in the prior year period, primarily due to an increase of $1.2 million in personnel and related costs associated with higher headcount, an increase of $2.2 million in outside costs for the Phase 1/1b clinical trial for CPI-444, and an increase of $1.4 million in outside costs associated with other clinical development programs.

General and administrative expenses for the three months ended September 30, 2016 totaled $2.8 million, an increase of $2.2 million from $0.6 million in the prior year period, primarily due to an increase of $1.0 million in personnel and associated costs, an increase of $0.7 million in patent and related costs and $0.2 million in costs associated with operating as a public company.

The net loss for the three months ended September 30, 2016 was $10.3 million, compared with a net loss of $3.2 million, for same period in 2015. Total stock compensation expense for the three months ended September 30, 2016 was $1.3 million, compared to $0.1 million in the prior year period.

On November 3, 2016 Clovis Oncology, Inc. (NASDAQ:CLVS) reported financial results for the quarter ended September 30, 2016, and provided an update on the Company’s clinical development programs and regulatory outlook for the remainder of 2016 (Press release, Clovis Oncology, NOV 3, 2016, View Source;p=RssLanding&cat=news&id=2219461 [SID1234516267]).

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"We are actively preparing for a U.S. launch of rucaparib pending FDA’s decision on our NDA, and we have completed our Marketing Authorization Application submission seeking European approval for rucaparib," said Patrick J. Mahaffy, President and CEO of Clovis Oncology. "Importantly, we remain focused on exploring rucaparib more broadly, and expect several studies to initiate this quarter, including the TRITON2 study in prostate cancer, the ARIEL4 confirmatory study in ovarian cancer and investigator-sponsored studies exploring rucaparib as maintenance therapy in gastroesophageal cancer and also in combination with bevacizumab in ovarian cancer."

Third Quarter 2016 Financial Results

Clovis had $318.8 million in cash, cash equivalents and available-for-sale securities as of September 30, 2016. Cash used in operating activities was $60.3 million for the third quarter of 2016 and $212.0 million for the first nine months of 2016, compared with $71.7 million and $177.4 million for the comparable periods of 2015. Clovis had approximately 38.6 million outstanding shares of common stock as of September 30, 2016.

Clovis reported a net loss of $65.7 million, or ($1.70) per share, for the third quarter of 2016 and $278.4 million or ($7.24) per share for the first nine months of 2016. The net loss for the third quarter of 2015 was $98.6 million or ($2.62) per share and $233.3 million or ($6.62) per share for the first nine months of 2015. Net loss for the third quarter of 2016 included share-based compensation expense of $9.2 million and $29.7 million for the third quarter and the first nine months of 2016, respectively, compared to $12.4 million and $29.5 million for the comparable periods of 2015.

Notably, the net loss for the first nine months of 2016 includes a net expense non-cash impact of $49.9 million relating to the lucitanib product rights recorded in 2013 in connection with the Company’s acquisition of Ethical Oncology Science S.p.A. (EOS), comprised of a $104.5 million non-cash expense for the impairment of the intangible asset, a $25.5 million non-cash expense credit for the reduction in the fair value of the contingent purchase consideration liability and a $29.2 million related non-cash income tax benefit. The adjusted net loss excluding these items was $228.5 million or ($5.95) per share for the first nine months of 2016.

Research and development expenses totaled $54.3 million for the third quarter of 2016, and $196.7 million for the first nine months of 2016, compared to $76.1 million and $193.3 million, respectively, for the comparable periods in 2015. The decrease in expenses for the third quarter is primarily due to decreased development activities for rociletinib compared to the prior year partially offset by higher expenses associated with rucaparib development programs and launch preparation. The increase in expenses for the nine-month period is primarily due to increased development activities for the rucaparib program, launch preparation and increased personnel-related expenses, partially offset by lower expenses related to decreased clinical development activities for rociletinib.

General and administrative expenses totaled $9.2 million for the third quarter of 2016, and $28.5 million for the first nine months of 2016, compared to $8.3 million and $22.3 million for the comparable periods in 2015. The increase year over year is primarily due to higher legal expense and personnel costs for employees engaged in general and administrative activities.

Clovis expects cash used in operating activities for 2016 will total approximately $276 – $286 million, and to end the year with approximately $245 – $255 million in cash, cash equivalents and available-for-sale securities. This change to cash guidance is primarily related to the recent amendment to the worldwide license agreement with Pfizer for rucaparib which allows Clovis the option to defer payment of the milestone payments payable upon U.S. Food and Drug Administration (FDA) approval of a first NDA in the US and European Medicines Authority (EMA) approval of a first Marketing Authorization Application (MAA) in EU to a date that is 18 months after the date of achievement of such milestones, in exchange for certain higher payments related to the achievement of such milestones. The Company anticipates being able to continue to fund operations into 2018 from currently available cash, cash equivalents and available-for-sale securities.

2016 Key Milestones and Objectives for Rucaparib

During the third quarter of 2016, the rucaparib NDA regulatory filing was accepted by FDA for accelerated approval and granted priority review status with a PDUFA date of February 23, 2017. The application is for rucaparib as monotherapy treatment of patients with advanced ovarian cancer with deleterious BRCA-mutated tumors previously treated with two or more chemotherapies. Tumor BRCA mutations include germline and/or somatic mutations. Rucaparib was granted Breakthrough Therapy designation by the FDA in April 2015.

Foundation Medicine, Clovis’ companion diagnostic partner, has submitted a Premarket Approval (PMA) application for its tissue-based diagnostic assay designed to identify tumor BRCA mutations, including germline and somatic mutations, with the FDA. The timing of the submission is expected to allow for regulatory approval of the companion diagnostic at substantially the same time that rucaparib could be approved.

In addition, the Company submitted an MAA for rucaparib to the European Medicines Agency for a comparable ovarian cancer treatment indication earlier this week.

In October, in support of the potential U.S. commercial launch of rucaparib, we announced the signing of a long-term manufacturing agreement with Lonza, our current manufacturer. We expect that this new agreement for a dedicated manufacturing line will provide security of supply and reduce our cost of goods over time.

Clovis has completed enrollment in the ARIEL3 Phase 3 randomized maintenance study, with data expected to be available in 2H 2017. Pending positive data, the Company intends to follow up with a supplemental NDA (sNDA) for second-line maintenance therapy in women with ovarian cancer who have responded to platinum based therapy.

At the 2016 ESMO (Free ESMO Whitepaper) Congress in early October, the primary efficacy and safety data from the NDA dataset for rucaparib were presented in an oral session, including the following highlights:

The RECIST ORR (objective response rate as assessed by the investigator, which includes complete and partial responses) in the 106 patients evaluable for efficacy was 54% (95% CI: 43.8-63.5).
Duration of response by investigator assessment in the efficacy population was 9.2 months (95% CI: 6.6-11.7 months).
The most common treatment-emergent adverse events (AEs) (all grades) reported in ≥20 percent of patients in the safety population (n=377) included nausea (77%), asthenia/fatigue (77%), vomiting (46%), anemia (44%), increased ALT/AST (41%) and constipation (40%). The most common Grade 3/4 treatment-emergent AEs reported in ≥10 percent of patients were anemia (25%), asthenia/fatigue (11%) and ALT/AST elevations (11%).
Several clinical studies, including both Clovis-sponsored and investigator-initiated trials, recently initiated or are planned to begin enrolling patients during the fourth quarter. These include the Clovis-sponsored ARIEL4 confirmatory study in advanced BRCA mutant (inclusive of germline and somatic) ovarian cancer; an investigator-sponsored study evaluating rucaparib and bevacizumab in combination as a first-line maintenance therapy for advanced ovarian cancer; the investigator-initiated RUBY study in women with breast cancer whose tumors have a somatic BRCA mutation or homologous recombination deficient (HRD) signature other than a known germline BRCA mutation; the investigator-initiated PLATFORM study in gastroesophageal cancer in the first-line maintenance setting; and the Clovis-sponsored TRITON2 (Trial of Rucaparib in Prostate Indications) study in metastatic castrate-resistant prostate cancer (mCRPC), a Phase 2 single-arm study enrolling patients with BRCA mutations and ATM mutations (both inclusive of germline and somatic) or other deleterious mutations in other homologous recombination (HR) repair genes and all patients will have progressed after receiving one line of taxane-based chemotherapy and one or two lines of androgen-receptor (AR) targeted therapy.

The Clovis-sponsored TRITON3 study, a Phase 3 comparative study in mCRPC enrolling BRCA mutant and ATM mutant (both inclusive of germline and somatic) patients who have progressed on AR-targeted therapy and who have not yet received chemotherapy in the castrate-resistant setting is planned to initiate during the first quarter of 2017. TRITON3 will compare rucaparib to physician’s choice of AR-targeted therapy or chemotherapy in these patients. Also during the first quarter of 2017, the Phase 1b combination study of Genentech’s cancer immunotherapy Tecentriq (atezolizumab; anti-PDL1) and rucaparib for the treatment of gynecological cancers, with a focus on ovarian cancer, is expected to have the first patient initiated (FPI).

About Rucaparib

Rucaparib is an oral, small molecule inhibitor of PARP1, PARP2 and PARP3 being developed for advanced ovarian cancer. Rucaparib was granted Breakthrough Therapy designation by the FDA in April 2015; and its NDA submission for the treatment of advanced ovarian cancer is currently under active review with the FDA. The MAA submission in Europe for a comparable ovarian cancer indication completed during the fourth quarter of 2016. Additionally, rucaparib is being developed as maintenance therapy in the ARIEL3 trial for patients with tumors with BRCA mutations and other DNA repair deficiencies beyond BRCA, including those with high genomic loss of heterozygosity (LOH) commonly referred to as "BRCA-like." Data from ARIEL3 are expected in 2H 2017, which is expected to be followed by the submission of a sNDA for a second line or later maintenance indication. Clovis is also exploring rucaparib in other solid tumor types with significant BRCA and BRCA-like populations, including prostate, breast and gastroesophageal cancers. Clovis holds worldwide rights for rucaparib.

On November 3, 2016 Cerus Corporation (NASDAQ: CERS) reported financial results for the third quarter ended September 30, 2016 (Press release, Cerus, NOV 3, 2016, View Source [SID1234516264]).

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Recent developments include:
The U.S. Food and Drug Administration’s (FDA) revised recommendations for protecting blood components from Zika virus was expanded to recommend use of pathogen reduction technology and/or an investigational blood screening test to all U.S. blood centers.

The first Cerus U.S. blood center customers have submitted biologics license applications to the FDA to request allowance for the interstate transport of INTERCEPT-treated platelet components.

Hemolife Fundacion Banco Nacional de Sangre became the first blood center to enter into routine use with the INTERCEPT Blood System in Colombia.

Cerus’ global commercial leadership was strengthened with the appointment of Vivek Jayaraman as chief commercial officer.
"U.S. momentum continues to build, with the number of customers initiating INTERCEPT production accelerating from just three at the beginning of the year to 17 customers to date. With another 22 contracted customers slated to begin production, we are in a healthy position for growth," said William ‘Obi’ Greenman, Cerus’ president and chief executive officer. "Beyond platelets and plasma, we are also moving forward with activities related to our red cell program, with plans to submit for European CE Mark approval and to initiate a U.S. Phase III trial."

Revenue
Product revenue for the third quarter of 2016 was $10.2 million, up 26% from the $8.0 million recognized during the same period in 2015. The increase in reported product revenue for the quarter was primarily driven by a year-over-year increase in INTERCEPT disposable kit demand of 30% in our EMEA and U.S. commercial regions. Product revenue for the first nine months of 2016 was $27.1 million, up 10% from the first nine months of 2015, driven primarily by increased kit sales in our EMEA region and sales to U.S. customers.

Revenue from our Biomedical Advanced Research and Development Authority (BARDA) agreement for the three and nine months ended September 30, 2016, was $0.3 million. We did not recognize any revenue from our BARDA agreement during the three and nine months ended September 30, 2015.

The Company continues to expect 2016 global product revenue in the range of $37 million to $40 million with anticipated growth supported by new business opportunities in both its European and U.S. markets.

Gross Margins
Gross margins on product revenue for the third quarter of 2016 were 46%, compared to 31% for the third quarter of 2015. Gross margins on product revenue for the first nine months of 2016 were 46%, compared to 30% for the first nine months of 2015. Gross margins on product revenue for the three and nine months ended September 30, 2016, increased primarily due to the Company’s disposable kit manufacturing agreement with Fresenius Kabi AG, entered into during the fourth quarter of 2015, and efficiencies realized in 2016 related to inventory management.

Operating Expenses
Total operating expenses for the third quarter of 2016 were $19.2 million, compared to $18.7 million for the third quarter of 2015. Total operating expenses for the first nine months of 2016 were $59.0 million, compared to $53.3 million for the first nine months of 2015. Selling, general and administrative expenses increased for the three and nine months ended September 30, 2016, primarily due to increased spending related to selling and marketing activities associated with the commercialization of INTERCEPT in the U.S. market. Research and development expenses drove the majority of the reported increase for the nine months ended September 30, 2016, primarily due to activities associated with clinical development of the red blood cell system, the pursuit of potential premarket applications supplement approvals for the platelet and plasma systems and the initial activities under the BARDA agreement.

Operating and Net Loss
Operating losses during the third quarter of 2016 were $14.3 million, compared to $16.2 million for the third quarter of 2015, and $46.3 million compared to $46.1 million for the nine months ended September 30, 2016 and September 30, 2015, respectively.
Net loss for the third quarter of 2016 was $14.4 million, or $0.14 per diluted share, compared to a net loss of $15.7 million, or $0.17 per diluted share, for the third quarter of 2015. Net loss for the first nine months of 2016 was $49.4 million, or $0.49 per diluted share, compared to a net loss of $41.1 million, or $0.48 per diluted share, for the same period of 2015.

Net loss for the third quarter of 2015 was positively impacted by the mark-to-market adjustments of the Company’s previously outstanding warrants, which resulted in non-cash gains of $1.1 million and $4.7 million during the third quarter of 2015 and first nine months of 2015, respectively. The Company has no remaining outstanding warrants and as such, does not expect mark-to-market adjustments going forward.

Cash, Cash Equivalents and Investments
At September 30, 2016, the Company had cash, cash equivalents and short-term investments of $81.2 million compared to $107.9 million at December 31, 2015.

At September 30, 2016, the Company had approximately $19 million in outstanding debt under its loan agreement with Oxford Finance.