On November 8, 2016 Mylan N.V. (NASDAQ, TASE: MYL) and Biocon Ltd. (BSE code: 532523, NSE: BIOCON) reported submission of Mylan’s biologics license application (BLA) for MYL-1401O, a proposed biosimilar trastuzumab, to the U.S. Food and Drug Administration (FDA) through the 351(K) pathway (Press release, Mylan, NOV 8, 2016, View Source [SID1234516440]). This product is a proposed biosimilar to branded trastuzumab, which is indicated to treat certain HER2-positive breast and gastric cancers. Mylan and Biocon believe that this has the potential to be the first submission of a proposed biosimilar trastuzumab in the U.S.

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The submitted BLA includes a comprehensive package of analytical similarity, nonclinical and clinical data. The clinical data consists of two pharmacokinetic studies and the HERITAGE confirmatory efficacy and safety trial. The results of the HERITAGE trial were presented at this year’s American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting and the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress.
Mylan President Rajiv Malik commented: "The FDA submission for biosimilar trastuzumab marks Mylan’s first FDA biosimilar submission from our broad portfolio of biosimilar products in development and our product has the opportunity to be the first biosimilar trastuzumab approved in the U.S. This submission also is another demonstration of the strength of the Mylan/Biocon partnership and our shared commitment to increasing access to these critical medicines worldwide. Our trastuzumab biosimilar is already being sold in 11 developing markets, including India, and we look forward to bringing the product to market in the U.S. and Europe upon approval."
Dr Arun Chandavarkar, CEO & Joint MD, Biocon, commented: "The submission of our proposed biosimilar trastuzumab with the U.S. FDA is an important milestone of Biocon and Mylan’s joint global biosimilars program and demonstrates our commitment to provide access to high-quality and affordable biologics to patients across the globe. Cancer patients in India and emerging markets have benefited with our trastuzumab and this advancement in the U.S. will enable us to enhance access to this affordable therapy to larger patient pools."

On November 8, 2016 Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) ("Valeant" or the "Company") reported third quarter 2016 financial results (Press release, Valeant, NOV 8, 2016, http://ir.valeant.com/news-releases/2016/11-08-2016-110124528 [SID1234516500]).

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"This past quarter, we made further progress toward establishing the new Valeant," said Joseph C. Papa, Chairman and Chief Executive Officer. "We have, where appropriate, begun to centralize some parts of the business, and hired two key senior executives: Paul Herendeen, Chief Financial Officer, and Dr. Louis Yu, Chief Quality Officer. We also have started to present our financial results under three operating and reportable segments, which we believe will help clarify areas of strength and provide additional transparency. While we have revised our expectations for the remainder of 2016, I continue to be encouraged by the commitment of our employees who work each day toward meeting our mission of helping improve people’s lives through our healthcare products."

Total Revenues
Total Revenues in the third quarter of 2016 were $2.48 billion as compared to $2.79 billion in the third quarter of 2015, a decrease of 11%, primarily due to a decline in product sales revenues from our existing businesses. Third quarter revenues were also impacted by negative foreign currency exchange, as well as divestitures and discontinuations, which were partially offset by incremental product sales revenues from acquisitions completed in 2015.

On a sequential basis, revenues grew from a base of $2.37 billion in the first quarter of 2016 to $2.42 billion in the second quarter to $2.48 billion in the third quarter.

GAAP Earnings Per Share (EPS)
GAAP EPS for the third quarter of 2016 came in at ($3.49) as compared to $0.14 in the third quarter of 2015. On a sequential basis, GAAP EPS moved from ($1.08) in the first quarter of 2016 to ($0.88) in the second quarter to ($3.49) in the third quarter.

Adjusted EPS (non-GAAP)

Adjusted EPS (non-GAAP) for the third quarter of 2016 came in at $1.55 as compared to $2.41 in the third quarter of 2015. On a sequential basis, adjusted EPS (non-GAAP) grew from $1.27 in the first quarter of 2016 to $1.40 in the second quarter to $1.55 in the third quarter.

Net Income (Loss)
Net loss in the third quarter of 2016 was ($1.22) billion as compared to net income of $49.5 million in the third quarter of 2015. As a result of the goodwill impairment analyses conducted in connection with the change in its reporting units, the Company recognized a goodwill impairment charge of $1.05 billion in the three months ended September 30, 2016, mainly attributable to the lower fair value in certain US businesses, mainly the Salix business. The net loss in the third quarter was mainly attributable to this goodwill impairment charge.

Adjusted Net Income (non-GAAP)
Adjusted net income (non-GAAP) in the third quarter of 2016 was $543 million as compared to $845 million in the third quarter of 2015. On a sequential basis, adjusted net income (non-GAAP) was $443 million in the first quarter of 2016, growing to $488 million the second quarter followed by $543 million in the third quarter.

Adjusted EBITDA(non-GAAP)
Adjusted EBITDA (non-GAAP) for the third quarter of 2016 came in at $1.16 billion, an improvement over second quarter results of $1.09 billion and first quarter results of $1.01 billion.

Segment Revenues
As announced on August 9, 2016, Valeant now presents results in three operating and reportable segments: Bausch + Lomb / International, Branded Rx, and U.S. Diversified Products.

The Bausch + Lomb / International segment consists of (i) sales in the U.S. of pharmaceutical products, OTC products and medical device products in the area of eye health, primarily comprised of Bausch & Lomb products, with a focus on four product offerings (Vision Care, Surgical, Consumer and Ophthalmology Rx), and (ii) branded pharmaceutical products, branded generic pharmaceutical products, OTC products, medical devices, and Bausch + Lomb products sold in Europe, Asia, Australia and New Zealand, Latin America, Africa and the Middle East.

In the third quarter of 2016, the Bausch + Lomb / International segment reported revenues of $1.16 billion, an increase of 4% from $1.12 billion in the third quarter of 2015. The segment, which contributed 47% of total company revenues, reflected an increase in product sales revenues of $67 million in the third quarter of 2016 from all 2015 acquisitions, partially offset by a $4 million decline in product sales revenues from our existing businesses. The decline was primarily due to lower realized prices related to our ophthalmology products as a result of the implementation of rebates and other price adjustments versus prior year.
The decline in product sales due to lower realized prices was partially offset by higher volumes in U.S. consumer product sales, as well as product sales in Eastern Europe (excluding Poland) and China. The results were also affected by, to a lesser extent, the negative impact of foreign exchange on the existing business and from divestitures and product discontinuations.

On a sequential basis, segment revenues grew from $1.07 billion in the first quarter of 2016 to $1.2 billion in the second quarter and $1.16 billion in the third quarter.

The Branded Rx segment consists of sales of pharmaceutical products related to (i) the Salix product portfolio in the U.S., (ii) the Dermatological product portfolio in the U.S., (iii) the Canadian product portfolio, and (iv) product portfolios in the U.S., in the areas of oncology, dentistry and women’s health.

The Branded Rx segment reported third quarter 2016 revenues of $847 million, a decline from $1.1 billion in the third quarter of 2015. The segment, which contributed 34% of total company revenues, reflected a decline in product sales revenue from our existing business of $251 million in the third quarter. The gap was primarily a result of lower average realized prices resulting from higher managed care rebates in dermatology and Salix, lower price appreciation credits in dermatology and Salix, and changes in the fulfillment model which led to reduced volumes.

Wholesaler inventory levels at Salix were reduced to approximately 1.5 months as of September 30, 2016, consistent with the overall inventory levels at our U.S. wholesalers for branded products (excluding generic products).

On a sequential basis, segment revenues grew from $739 million in the first quarter of 2016 and $732 million in the second quarter to $847 million in the third quarter.

The U.S. Diversified Products segment consists of (i) sales in the U.S. of pharmaceutical products, OTC products and medical device products in the areas of neurology and certain other therapeutic classes, including aesthetics (which includes the Solta and Obagi businesses), and (ii) sales of generic products in the U.S.

The U.S. Diversified Products segment reported third quarter 2016 revenues of $471 million, a decline from $564 million in the third quarter of 2015. The segment, which contributed 19% of total company revenues, reflected a decline in product sales revenue from our existing business of $92 million, primarily due to our neurology products being challenged by generic competition.
To a lesser extent, the decline in product sales was due to lower average realized prices of our neurology products, which resulted from higher managed care rebates, lower price appreciation credits and higher group purchasing organization chargebacks on Nitropress and Isuprel, as well as the negative impact from divestitures and discontinuations. These factors were partially offset by the incremental product sales revenue from all 2015 acquisitions.

On a sequential basis, segment revenues lagged from $560 million in the first quarter of 2016 to $491 million in the second quarter to $471 million in the third quarter.

Operating Expenses
Cost of Goods Sold increased $15 million, or 2%, to $649 million in the third quarter of 2016 as compared to $635 million in the third quarter of 2015, primarily due to an increase related to acquisitions completed in 2015, as well as costs associated with the voluntary recall of PeroxiClear, partially offset by a decline in sales volumes, and decreases related to divestitures and discontinuations.

As a percentage of total revenues, COGS was 26% in the third quarter of 2016, as compared to 23% in the same period in 2015. The increase in COGS percentage was primarily driven by unfavorable foreign exchange, the impact of mix mainly lower neurology revenues due to generic competition, and lower dermatology revenues. Those factors were partially offset by a favorable sales impact from certain products acquired in the Salix acquisition in 2015, such as Xifaxan, which represent higher margin products as compared to our overall portfolio.

On a sequential basis, COGS rose from $620 million in the first quarter of 2016 to $647 million in the second quarter and $649 million in the third quarter of 2016. COGS as a percentage of total revenues was 26% in the first quarter of 2016, followed by 27% in the second quarter and 26% in the third quarter.

Selling, General and Administrative (SG&A) expenses decreased $37 million, or 5%, to $661 million in the third quarter of 2016 as compared to $698 million in the third quarter of 2015. As a percentage of total revenues, SG&A was 27% in the third quarter of 2016, as compared to 25% in the same period in 2015. SG&A reflected lower expenses of approximately $73 million incurred by the U.S. operations, primarily due to lower advertising and promotional expenses for our dermatology business. This was offset by higher corporate expenditures of $22 million primarily driven by increased personnel costs resulting from changes in our senior management team as well as professional fees incurred related to our material weakness remediation efforts, higher expenses of $17 million related to 2015 acquisitions, and professional fees of $18 million in the third quarter in connection with recent legal and governmental proceedings, investigations and information requests relating to, among other matters, our distribution, marketing, pricing, disclosure and accounting practices.

SG&A has shown a quarterly sequential decline from $813 million in the first quarter of 2016 to $672 million in the second quarter and $661 million in the third quarter. As a percentage of total revenues, SG&A has shown a sequential quarterly decline from 34% in the first quarter of 2016 to 28% in the second quarter and 27% in the third quarter.

Research and development (R&D) expenses remained flat at $101 million in the third quarter of 2016 as compared to the third quarter of 2015. In the first nine months of 2016, R&D increased $90 million, or 38%, to $328 million as compared to $239 million in the first nine months of 2015, primarily due to the development programs related to the Company’s dermatology product portfolio, as well as spending on brodalumab and programs acquired from Salix.

GAAP Cash Flow from Operations
GAAP Cash flow from operations was $570 million in the third quarter of 2016 as compared to $733 million in the third quarter of 2015. On a sequential basis, GAAP Cash flow from operations was $557 million in the first quarter of 2016, $448 million in the second quarter and $570 million in the third quarter.

2016 Full Year Guidance Revised
Valeant has revised its full year 2016 guidance as follows:
Total Revenues now expected to be in the range $9.55 billion – $9.65 billion, from previous range of $9.9 billion to $10.1 billion
Adjusted EPS (non-GAAP) now expected to be $5.30 – $5.50, from previous range of $6.60 -$7.00
Adjusted EBITDA (non-GAAP) now $4.25 billion – $4.35 billion, from previous range of $4.80 billion – $4.95 billion
Other than with respect to Total Revenues, the Company only provides guidance on a non-GAAP basis. The Company does not provide reconciliations of forward-looking Adjusted EPS (non-GAAP) and Adjusted EBITDA (non-GAAP) to GAAP, due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations. In periods where there are not expected to be significant acquisitions or divestitures, 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 net income (loss). However, because other deductions (such as restructuring, gain or loss on extinguishment of debt and litigation settlements) 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 EPS and GAAP net income (loss) being materially less than projected Adjusted EPS (non-GAAP) and Adjusted EBITDA (non-GAAP).

On November 8, 2016 CTI BioPharma Corp. (NASDAQ and MTA:CTIC) reported financial results for the third quarter ended September 30, 2016 (Press release, CTI BioPharma, NOV 8, 2016, View Source [SID1234516415]).

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"We recently reported top-line data from our second Phase 3 trial of pacritinib and are encouraged by its clinical profile, particularly in patients with severe thrombocytopenia, and look forward to the presentation of the full results at an upcoming scientific meeting," said Richard Love, Interim President and CEO of CTI BioPharma. "With this data in hand, our top priority is to work with the FDA in short order to seek to address their recommendations for getting pacritinib off clinical hold and back on a development track. This has been a challenging year for us; however, we are committed to bringing novel therapies to patients with a critical unmet medical need."

Recent Events

In August 2016, the Company announced top-line results from the PERSIST-2 randomized, controlled Phase 3 clinical trial comparing pacritinib, an investigational oral multikinase inhibitor, with physician-specified best available therapy (BAT) for the treatment of patients with myelofibrosis whose platelet counts are less than or equal to 100,000 per microliter. Preliminary results demonstrated that the PERSIST-2 trial met one of the co-primary endpoints showing a statistically significant response rate in spleen volume reduction in patients with myelofibrosis treated with pacritinib compared to BAT, including the approved JAK2 inhibitor ruxolitinib (p<0.01). Although the PERSIST-2 trial did not meet the other co-primary endpoint of greater than 50 percent reduction in Total Symptom Score (TSS), the preliminary analysis approached marginal significance compared to BAT (p=0.0791).
In October 2016, the Company regained worldwide rights for the development and commercialization of pacritinib following termination of the Pacritinib License Agreement with Baxalta, which is now part of Shire plc. Under the terms of the Asset Return and Termination Agreement with Baxalta, the Company has received $10.3 million from Shire as reimbursement for certain expenses incurred or to be incurred. The Company in exchange has agreed to provide a one-time payment to Baxalta, upon the first regulatory approval or any pricing and reimbursement approvals of a product containing pacritinib, in the amount of approximately $10.3 million which represents certain amounts paid by Baxalta for the benefit of the pacritinib program manufacturing efforts.
In October 2016, the Company announced that James A. Bianco, M.D. retired from his position as President and Chief Executive Officer. At the request of the Board of Directors, Richard Love, a director of the Company since 2007, was appointed to serve as Interim President and Chief Executive Officer. Mr. Love started two biotechnology companies, Triton Biosciences Inc. and ILEX Oncology Inc., and he served as Chief Executive Officer for Triton Biosciences Inc. from 1983 to 1991 and as Chief Executive Officer for ILEX Oncology from 1994 to 2001. Mr. Love also served in executive positions at not-for-profit organizations including the Cancer Therapy and Research Center (CTRC) and the Translational Genomics Research Institute (TGen).
Third Quarter Financial Results

Total revenues for the third quarter and nine months ended September 30, 2016, were $4.4 million and $48.3 million, respectively, compared to $1.0 million and $4.8 million for the respective periods in 2015. The increase in total revenue for the nine month period in 2016 is primarily due to recognition of $32 million in milestone payments and reimbursement of development costs from Shire plc related to pacritinib. CTI BioPharma had previously received a cash advance for these milestone payments from Baxalta in the second quarter of 2015 that was accounted for as long-term debt until the achievement of the associated milestones in the first quarter of 2016. Net product sales of PIXUVRI for the third quarter and the nine months ended September 30, 2016, were $1.0 million and $3.3 million, respectively, compared to $0.7 million and $2.4 million for the respective periods in 2015.

GAAP operating loss for the third quarter and nine months ended September 30, 2016, was $28.7 million and $43.6 million, respectively, compared to GAAP operating loss of $32.0 million and $90.5 million for the respective periods in 2015. Non-GAAP operating loss, which excludes non-cash share-based compensation expense, for the third quarter and nine months ended September 30, 2016, was $23.6 million and $32.4 million, respectively, compared to the non-GAAP operating loss of $26.1 million and $77.5 million for the respective periods in 2015. Non-cash share-based compensation expense for the third quarter and nine months ended September 30, 2016, was $5.1 million and $11.2 million, respectively, compared to $5.9 million and $13.0 million for the respective periods in 2015. For information on CTI BioPharma’s use of non-GAAP operating loss and a reconciliation of such measure to GAAP operating loss, see the section below entitled "Non-GAAP Financial Measures."

Net loss for the third quarter of 2016 was $29.2 million, or ($0.10) per share, compared to a net loss of $32.6 million, or ($0.19) per share, for the same period in 2015. Net loss for the nine months ended September 30, 2016, was $45.6 million, or ($0.16) per share, compared to a net loss of $93.8 million, or ($0.54) per share, for the same period in 2015. The decrease in net loss for the third quarter and the nine months ended September 30, 2016, compared to the respective periods in 2015 is primarily due to increased net product sales and license and contract revenue.

As of September 30, 2016, cash and cash equivalents totaled $61.6 million, compared to $128.2 million at December 31, 2015.

On November 8, 2016 OncoSec Medical Incorporated ("OncoSec") (NASDAQ: ONCS), a company developing DNA-based intratumoral cancer immunotherapies, reported that new clinical data are being presented from a Phase II Investigator Sponsored Trial led by the University of California, San Francisco (UCSF) (Press release, OncoSec Medical, NOV 8, 2016, View Source [SID1234516426]). This single-arm, open-label trial assessed the combination of OncoSec’s investigational intratumoral therapy, ImmunoPulse IL-12, and Merck’s KEYTRUDA (pembrolizumab) in patients with unresectable metastatic melanoma. A predictive biomarker was used to enroll patients that have a low likelihood of response to an anti-PD1 agent alone, and the purpose of the trial is to assess whether the addition of ImmunoPulse IL-12 can increase response rates in these patients. The data will be presented at an oral poster presentation (#466) by Dr. Alain Algazi at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) ("SITC") Annual Meeting in National Harbor, MD on November 11, 2016 at 12:50 PM EST.

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In August 2016, OncoSec announced the publication of a research assay in the Journal of Clinical Investigation that might be used as a predicative biomarker in melanoma patients. The assay shows that patients with a low frequency of a certain phenotype of CD8 T cells, pre-disposes them to low response rates to PD-1 inhibitor therapy alone. The Company is using this biomarker assay to select patients considered to be PD-1 non responders for this ongoing combination study. The key endpoints of the study include: best overall response rate by the Response Evaluation Criteria in Solid Tumors (RECIST) v1.1 and immune-related Response Criteria; safety and tolerability; duration of response; 24-week landmark progression-free survival; median progression-free survival; and overall survival.

Results
Interim efficacy and safety data are available on 15 patients. In patients considered unable to respond to PD-1 we measured an overall response rate of 40% (6 /15), consisting of 4 complete responses and 2 partial responses by RECISTv1.1 criteria. Additionally, the therapy has an acceptable safety profile and was well tolerated. Analysis of tumor biopsies and blood correlated with patients’ responsiveness and demonstrated correlative immunological changes including an increased number of CD8+ tumor-infiltrating lymphocytes, tumoral RNA signatures and concordant immune phenotypes in the periphery. Investigators concluded that the combination of ImmunoPulse IL-12 with pembrolizumab in patients with an anti-PD-1 non-responsive phenotype enables an effective anti-PD-1 response.

Punit Dhillon, CEO of OncoSec, stated: "These results validate our therapeutic hypothesis for the ability of ImmunoPulse IL-12 to improve response rates in advanced melanoma. We wish to thank the investigators and patients for their continued participation in this study. We are working diligently to advance this agent towards registration-enabling studies, and we look forward to providing additional details regarding the Company’s operations and strategy at our upcoming Investor and Analyst Day on November 17, 2016."

Alain Algazi, M.D., Principal Investigator from UCSF, stated: "Although this open-label study is still ongoing and data are maturing, I am encouraged by the meaningful interim response rates that the combination of ImmunoPulse IL-12 and pembrolizumab has been able to achieve in a patient population otherwise expected to respond poorly to pembrolizumab alone. While checkpoint inhibition has conferred meaningful clinical benefit for advanced melanoma patients, there remains an urgent need to increase these agents’ efficacy through the rational combination with other immunotherapies. I look forward to the continued maturation of this data and to further reporting on the trial’s progress."

For more information about this trial, please visit: View Source