On July 29, 2015 RedHill Biopharma Ltd. (NASDAQ:RDHL) (TASE:RDHL) ("RedHill" or the "Company"), an Israeli biopharmaceutical company primarily focused on late clinical-stage, proprietary, orally-administered, small molecule drugs for inflammatory and gastrointestinal diseases, including gastrointestinal cancers, reported its financial results for the quarter ended June 30, 2015 (Press release, RedHill Biopharma, JUL 29, 2015, View Source [SID:1234506741]).

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Financial highlights for the second quarter and six months ended June 30, 2015:

Revenues for the six months ended June 30, 2015 were immaterial compared to revenues of approximately $7.0 million for the six months ended June 30, 2014, which resulted mainly from an upfront payment of $7.0 million received from Salix Pharmaceuticals, Inc. ("Salix") for the out-licensing of RedHill’s RHB-106 encapsulated bowel preparation and related rights.

Cost of Revenues for the six months ended June 30, 2015 was immaterial compared to approximately $1.0 million for the six months ended June 30, 2014, which resulted from a payment of $1.0 million to Giaconda Limited, triggered by the Salix licensing transaction.

Research and Development Expenses, net for the quarter ended June 30, 2015 were approximately $5.1 million, an increase of approximately $1.9 million, or approximately 59%, compared to approximately $3.2 million in the quarter ended June 30, 2014. Research and Development Expenses, net for the six months ended June 30, 2015 were approximately $8.9 million, an increase of approximately $4.0 million, or approximately 82%, compared to approximately $4.9 million in the six months ended June 30, 2014. The increase in both periods was mainly due to expenses related to the ongoing Phase III studies with RHB-104 (Crohn’s disease), RHB-105 (H. pylori) and BEKINDA (gastroenteritis and gastritis).

General and Administrative Expenses for the quarter ended June 30, 2015 were approximately $0.8 million, a decrease of approximately $0.2 million, or approximately 20%, compared to approximately $1.0 million in the quarter ended June 30, 2014. The decrease was mainly due to a decrease in share-based compensation.

Financing Expenses, net for the quarter ended June 30, 2015 were approximately $0.7 million, an increase of approximately $0.3 million, or approximately 75%, compared to approximately $0.4 million in the quarter ended June 30, 2014. The increase was mainly due to a non-cash financing expense of $0.9 million resulting from the revaluation of the Company’s derivative financial instruments.

Operating Loss for the quarter ended June 30, 2015 was approximately $5.9 million, an increase of approximately $1.8 million, or approximately 44%, compared to approximately $4.1 million in the quarter ended June 30, 2014. The increase resulted mainly from an increase in Research and Development Expenses, net. Operating Loss for the six months ended June 30, 2015 was approximately $10.6 million, an increase of approximately $9.8 million compared to approximately $0.8 million in the six months ended June 30, 2014. The increase was mainly due to the $7 million revenues from the Salix transaction received in the first quarter of 2014 and to an increase in Research and Development Expenses, net.

Net Cash Used in Operating Activities for the quarter ended June 30, 2015 was approximately $4.7 million, an increase of approximately $0.5 million, or approximately 12%, compared to approximately $4.2 million in the quarter ended June 30, 2014. The increase resulted mainly from an increase in Research and Development Expenses, net. Net Cash Used in Operating Activities for the six months ended June 30, 2015 was approximately $8.1 million, an increase of approximately $5.6 million, or approximately 224%, compared to approximately $2.5 million in the six months ended June 30, 2014. The increase was mainly due to revenues from the Salix transaction received in the first quarter of 2014.

Net Cash Provided by Investment Activities for the quarter ended June 30, 2015 was approximately $3.5 million, compared to Net Cash Used in Investment Activities of approximately $16.8 million in the quarter ended June 30, 2014. The Net Cash Provided by Investment Activities in the quarter ended June 30, 2015 was mainly due to the change in investment in short-term bank deposits and partially offset by an upfront payment of $1.5 million to Apogee Biotechnology Corporation ("Apogee") as part of the Apogee licensing transaction. In addition, the Company recorded $2.0 million as a current liability as part of the same Apogee licensing transaction. Net Cash Used in Investment Activities for the six months ended June 30, 2015 was approximately $3.6 million, a decrease of approximately $13.2 million, or approximately 79%, compared to approximately $16.8 million in the six months ended June 30, 2014. The decrease was mainly due to investments of cash in bank deposits in the amount of $17 million during the six months ended June 30, 2014.

Net Cash Provided by Financing Activities for the six months ended June 30, 2015 was approximately $13.2 million, mainly from the February 2015 public offering, compared to approximately $24.4 million for the six months ended June 30, 2014, mainly from two private placements, for a total of $20 million and the exercise of warrants, during the first quarter of 2014.

Cash Balance1 as of June 30, 2015 was approximately $26.6 million,compared to $32.6 million as of March 31, 2015. The decrease resulted mainly from an increase in expenses due to the Company’s research and development activities. The cash position as of June 30, 2015 does not include the gross proceeds of $44.5 million before underwriting discounts and commissions and other offering expenses from the July 2015 public offering.

1 Including cash, bank deposits and short-term investments.

Ori Shilo, Deputy CEO, Finance and Operations said: "The second quarter of 2015 was very successful for RedHill. We reached an important milestone with the positive top-line results from the RHB-105 (H. pylori) first Phase III study, successfully meeting the study’s primary endpoint. Our recent public offering of $44.5 million in gross proceeds has significantly strengthened our cash position to approximately $66 million as of July 28, 2015, and allows us to continue to develop our pipeline of advanced clinical programs, including the two ongoing Phase III studies with BEKINDA for gastroenteritis and with RHB-104 for Crohn’s disease, and to conduct a second Phase III study with RHB-105 for H. pylori infection. During this quarter we completed enrollment for the Phase IIa, proof-of-concept clinical study of RHB-104 for multiple sclerosis, with top-line interim results expected in the fourth quarter of 2015 or the first quarter of 2016, and we have also recently initiated a Phase I/II clinical study in the U.S. with ABC294640 for refractory lymphoma."

Recent operational highlights:

On July 27, 2015, the Company updated that it had received confirmation from Salix Pharmaceuticals Ltd., recently acquired by Valeant Pharmaceuticals International, Inc., (NYSE:VRX) (TSX:VRX), that it continues the development of RedHill’s RHB-106 tasteless solid oral formulation bowel preparation development program. RedHill and Salix entered into an exclusive license agreement in February 2014, under which Salix acquired the worldwide exclusive rights to RedHill’s RHB-106 encapsulated formulation for bowel preparation and rights to other purgative developments.

On July 22, 2015, the Company closed its underwritten public offering, which included an over-allotment option exercised by the underwriters of 277,143 American Depository Shares ("ADSs"), for a total of 2,739,143 ADSs, each representing 10 of its ordinary shares, at an offering price of $16.25 per ADS. Gross proceeds from the public offering were approximately $44.5 million, before underwriting discounts and commissions and other offering expenses. Investors in the offering included Broadfin Capital LLC, Visium Asset Management, Special Situations Funds, funds managed by Sabby Management LLC, Longwood Capital Partners LLC, Menora Mivtachim and others. Nomura and Roth Capital Partners actedas joint book-running managers. MLV & Co. and H.C. Wainwright & Co. acted as co-managers for the offering.

On July 15, 2015, the Company announced that it had elected to extend its August 2014 exclusive option agreement with RESprotect GmbH for the acquisition of the pancreatic cancer drug candidate RP101. RedHill further updated that it had commenced a preclinical development program for RP101 to examine the efficacy of RP101 in various tumor models. The preclinical program is intended to support the existing clinical data and to assess a potential clinical development path for RP101.

On July 6, 2015, the Company announced that it had received regulatory authorization to commence patient enrollment in Australia and New Zealand for its ongoing Phase III study with RHB-104 for Crohn’s disease (the MAP US study), and had commenced patient screening in New Zealand. The MAP US first Phase III study is currently ongoing in the U.S. and additional countries, with interim analysis of the study expected in the second half of 2016, after half of the 270 patients expected to be enrolled in the study will have completed 26 weeks of treatment. RedHill further announced, in June 2015, that the UK Medicines and Healthcare Products Regulatory Agency (MHRA) had accepted RedHill’s Clinical Trial Application (CTA) to initiate a second Phase III study of RHB-104 for Crohn’s disease (the MAP EU study). The MAP EU study is planned to commence in a select number of European counties, and, once initiated, will run in parallel with the currently ongoing MAP US first Phase III study. RedHill also announced, in July 2015, that it had received two notices of allowance from the United States Patent and Trademark Office (USPTO) regarding two patent applications covering RHB-104, which are expected to be valid through 2029.

On June 29, 2015, the Company announced that it had initiated a Phase I/II clinical study in the U.S. to evaluate ABC294640 in patients with refractory/relapsed diffuse large B-cell lymphoma (DLBCL). The Phase I/II study is intended to evaluate the safety and tolerability of ABC294640, as well as provide a preliminary evaluation of efficacy of the drug in patients with refractory/relapsed DLBCL, primarily patients with HIV-related DLBCL. The study is funded primarily by a grant awarded by the National Cancer Institute (NCI) STTR program.

On June 15, 2015, the Company announced positive top-line results from its Phase III study with RHB-105 for the treatment of Helicobacter pylori (H. pylori) bacterial infection. Top-line results from the study demonstrated 89.4% efficacy in eradicating H. pylori infection with RHB-105. The ERADICATE Hp first Phase III study successfully met its primary endpoint of superiority over historical standard of care efficacy levels of 70%, with high statistical significance (p < 0.001). No serious adverse events, new or unexpected safety issues related to the drug candidate were noted in the study. A meeting with the FDA is being planned by RedHill to discuss the clinical and regulatory path for approval of RHB-105 as a potential best-in-class, first-line therapy for H. pylori infection. Completion of the clinical study report (CSR) is expected in the third quarter of 2015. RedHill also announced, in April 2015, that the USPTO had issued a Notice of Allowance for a new U.S. patent covering the RHB-105 formulation, which is expected to be valid until at least 2034.

On June 9, 2015, the Company announced that the last patient had been enrolled in the Phase IIa, proof-of-concept clinical study evaluating RHB-104 as an add-on therapy to interferon beta-1a in patients treated for relapsing-remitting multiple sclerosis (RRMS). Seventeen patients were enrolled in the open label Phase IIa study (the CEASE-MS study), which is designed to assess the efficacy and safety of RHB-104 as an add-on therapy to interferon beta-1a in patients suffering from RRMS following 24 weeks of treatment. Patients are evaluated for an additional term of 24 weeks after completing treatment with RHB-104. The CEASE-MS study is being conducted at two medical centers in Israel and top-line interim results are expected either in the fourth quarter of 2015 or the first quarter of 2016.

On July 29, 2015 PDL BioPharma, Inc. (NASDAQ: PDLI) reported that it has entered into a revenue interest assignment agreement (the "Agreement") in which it has agreed to provide ARIAD Pharmaceuticals, Inc. (NASDAQ: ARIA) with up to $200 million in revenue interest financing in exchange for royalties on the net revenues of Iclusig (ponatinib). Funding of the first $100 million will be made in two tranches of $50 million each, with the initial amount having already been funded on the closing date of the agreement and an additional $50 million to be funded on the 12-month anniversary of the closing date. In addition, ARIAD has an option to draw up to an additional $100 million at any time between the sixth and twelfth month anniversaries of the closing date.
PDL will initially receive 2.5% of the worldwide net revenues of Iclusig until the one year anniversary of the closing date, at which time the royalty increases to 5.0% of the worldwide net revenues of Iclusig and remains until December 31, 2018. Beginning January 1, 2019 and thereafter, the royalty rate will increase to 6.5%, subject to an additional increase to 7.5% if PDL’s funding exceeds $150 million. If PDL does not receive payments equal to or greater than the total amount funded on or before the fifth anniversary of each of the respective fundings, ARIAD will pay PDL the difference between the amounts funded by PDL and the amounts paid to such date. PDL has a put option based upon certain events and ARIAD has a call option to repurchase the revenue interest at any time. Both the put and call prices have been pre-determined.

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"We are extremely pleased to be able to structure a flexible, customized financial agreement that provides ARIAD with capital to support its key products," stated John P. McLaughlin, president and chief executive officer of PDL BioPharma.

"We are pleased to collaborate with PDL as we begin the next phase of our company’s growth with the initiation of a front-line trial of brigatinib and plans for its commercialization, along with continued commercialization of Iclusig," said Dr. Harvey J. Berger, M.D., chairman and chief executive officer of ARIAD. "Furthermore, this agreement provides ARIAD with the flexibility needed for future financing and business development activity."

About Iclusig (ponatinib)
Iclusig is approved in the U.S., EU, Australia, Israel, Canada and Switzerland.

In the U.S., Iclusig is a kinase inhibitor indicated for the:
Treatment of adult patients with T315I-positive chronic myeloid leukemia (chronic phase, accelerated phase, or blast phase) or T315I-positive Philadelphia chromosome positive acutelymphoblastic leukemia (Ph+ ALL).
Treatment of adult patients with chronic phase, accelerated phase, or blast phase chronic myeloid leukemia or Ph+ ALL for whom no other tyrosine kinase inhibitor (TKI) therapy is indicated.

These indications are based upon response rate. There are no trials verifying an improvement in disease-related symptoms or increased survival with Iclusig.

On July 29, 2015 Foundation Medicine, Inc. (NASDAQ:FMI) reported financial and operating results for its second quarter ended June 30, 2015 (Press release, Foundation Medicine, JUL 29, 2015, View Source [SID:1234506738]). Highlights for the quarter included:

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8,846 clinical tests reported in the second quarter, 50% year-over-year growth;

Second quarter revenue of $22.5 million, 55% year-over-year growth;

Second quarter revenue from biopharmaceutical customers of $10.0 million, 97% year-over-year growth;

FoundationCORE molecular information knowledgebase grew to over 50,000 patient cases;

Updated full-year 2015 revenue guidance to a range of $85 to $95 million, and full-year 2015 reported clinical test volumes to a range of 35,000 to 38,000.

Foundation Medicine reported total revenue of $22.5 million in the second quarter of 2015, compared to $14.5 million in the second quarter of 2014 and $19.3 million in the first quarter of 2015. Revenue from clinical testing in the second quarter of 2015 was $12.4 million, compared to $9.4 million in the second quarter of 2014 and $11.1 million in the first quarter of 2015.

The company reported 8,846 clinical tests in the second quarter of 2015, a 50% increase from the same quarter last year and a 13% increase from this year’s first quarter. This number includes 7,809 FoundationOne tests and 1,037 FoundationOne Heme tests. The results of an additional 1,451 tests were also reported to biopharmaceutical customers in this year’s second quarter.

Revenue from biopharmaceutical customers grew to $10.0 million in the second quarter, a 97% increase from the same quarter last year and an increase of 22% from the first quarter of 2015. This growth underscores the diversification of revenue generating activities provided to the company’s biopharmaceutical customers across clinical trial support, molecular information data access, and companion diagnostic development support.

"Foundation Medicine delivered 16% quarter-over-quarter revenue growth demonstrating that our commercial team continues to leverage a portfolio of differentiated products for both our clinical and biopharmaceutical clients and partners," said Michael Pellini, M.D., chief executive officer of Foundation Medicine. "That said, our clinical volume growth was affected by slower than anticipated progress towards obtaining a local coverage determination from our regional Medicare Administrative Contractor (MAC) and by some competitive noise in the market. As a result, we are adjusting guidance for clinical volume and annual revenues. We remain focused on building and investing in this business to deliver growth and value creation by integrating our molecular information products into routine patient care."

The company’s cancer knowledgebase, FoundationCORE, grew to more than 50,000 clinical cases. FoundationCORE is a unique asset and critical component of the value that Foundation Medicine delivers to both its biopharmaceutical and physician customers. The increasing scale and breadth of a high quality, clinically relevant oncology data set derived from the company’s analytically validated testing platform continues to enhance clinical practice and enable improved outcomes for patients.

Total operating expenses for the second quarter of 2015 were approximately $46.6 million, but included a one-time expense of $14.4 million in advisor fees related to the closing of our strategic collaboration with Roche, compared with $21.6 million for the second quarter of 2014. Net loss was approximately $33.1 million in the second quarter of 2015, or a $0.98 loss per share. Adjusted for this same one-time advisor fee expense in the second quarter, net loss was approximately $18.7 million. At June 30, 2015, the company held $264 million in cash and cash equivalents.

Recent Enterprise Highlights

Foundation Medicine announced the initiation of a large, multi-center clinical study to validate and support the anticipated commercial launch of its novel, circulating tumor DNA (ctDNA) assay to advance precision medicine in oncology.

HealthChoice Oklahoma and one additional regional payer in Southern California each enacted broad, pan-cancer coverage policies for FoundationOne and FoundationOne Heme for their members.

Palmetto GBA, a Medicare Administrative Contractor (MAC) with expertise in molecular diagnostics, issued a final local coverage determination on July 6th for comprehensive genomic profiling in a subset of patients with non-small cell lung cancer.
In June, Foundation Medicine and IMS Health announced a collaboration to advance the understanding and effectiveness of precision medicine for treating cancer. The collaboration associates claims, electronic medical records and biomarker data at the anonymized patient level with FoundationCORE to improve cancer care by better connecting patients to the right targeted therapies at the right time.

In June, Foundation Medicine and its collaborators presented 22 oral and poster presentations at the 2015 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting, including promising clinical outcomes underscoring the importance of integrating comprehensive genomic profiling into clinical oncology care.

In May, new clinical data presented at the 3rd Biennial Pediatric Neuro-Oncology Basic and Translational Research Conference demonstrated that FoundationOne identified a high frequency of clinically relevant genomic alterations in pediatric gliomas that informed treatment decisions and, in some, cases, resulted in promising outcomes.

2015 Outlook

The company expects to report between 35,000 and 38,000 clinical tests in 2015.

The company anticipates 2015 revenue will be in the range of $85 to $95 million.

The company expects operating expenses in the range of $128 to $138 million, plus an additional $14.4 million one-time advisor fee expense recognized in the second quarter related to the closing of the Roche strategic collaboration.

The company expects to launch a circulating tumor DNA (ctDNA) test for its biopharmaceutical partners by year-end, and a commercial ctDNA assay for clinical testing in 2016.

On July 29, 2015 Advaxis, Inc. (NASDAQ:ADXS), a clinical-stage biotechnology company developing cancer immunotherapies, reported that the company’s scientific founder, Yvonne Paterson, Ph.D., Professor of Microbiology at the Perelman School of Medicine at the University of Pennsylvania, will give a presentation titled "HER-2/neu as a target for Listeria-based cancer immunotherapy for breast cancer" on Tuesday, August 4 at 9:00 a.m. BST, at the 2015 World Congress on Breast Cancer in Birmingham, UK (Press release, Advaxis, JUL 29, 2015, View Source [SID:1234506737]).

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"I’ve dedicated over 20 years of work to the application of Listeria monocytogenes in targeted tumor-associated antigens," said Dr. Paterson. "I am thankful for the opportunity to showcase the success of this process in HER2 expressing breast cancers."

The presentation, which is scheduled to take place during the symposium on "Immunotherapy of Breast Cancer," will highlight pre-clinical research findings with Advaxis’s Lm Technology immunotherapy ADXS-HER2 which show promise for limiting tumor growth in HER2 expressing cancers, such as breast cancer. In clinical trials to date in multiple tumor types, Advaxis’s Lm Technology immunotherapies have been well-tolerated and have demonstrated anti-tumor activity, including prolonged survival, stable disease and, in some cases, complete or partial remission. In addition, preliminary data have demonstrated ADXS-HER2, in combination with palliative radiation, delayed tumor progression and prolonged overall survival in a group of 12 pet dogs with treatment-naïve spontaneous canine osteosarcoma.

"We are appreciative of the astounding work Dr. Paterson has done in the area of Lm Technology," said Daniel J. O’Connor, President and Chief Executive Officer of Advaxis. "Her scientific research has been instrumental in bringing about the first human trial of ADXS-HER2 in locally advanced/metastatic HER2 expressing solid tumors, which is scheduled to commence enrollment this summer."

Advaxis recently announced the United States Patent and Trademark Office (USPTO) granted a patent expanding Advaxis’s intellectual property portfolio in claiming numerous compositions for the development of ADXS-HER2 in HER2 expressing cancers.

About HER2 Expressing Cancers

Human epidermal growth factor receptor 2 (HER2) is expressed in a percentage of solid tumors such as breast, gastric, bladder, brain, pancreatic, ovarian and osteosarcoma. The American Cancer Society estimates that in 2015 in the United States alone there will be 231,840 new cases of invasive breast cancer; 24,590 new cases of gastric cancer; 74,000 new cases of bladder cancer; 22,850 new cases of brain/spinal cancer; 48,960 new cases of pancreatic cancer; 21,290 new cases of ovarian cancer; and 800 new cases of osteosarcoma. HER2 expression is associated with more aggressive disease, increased risk of relapse and decreased overall survival, and is an important target for immunotherapy.

About ADXS-HER2

ADXS-HER2 is an Lm Technology immunotherapy product candidate being developed by Advaxis for the targeted treatment of HER2 expressing cancers. ADXS-HER2 received orphan drug designation by the U.S. Food and Drug Administration (FDA) for the treatment of osteosarcoma in May 2014. Advaxis is developing ADXS-HER2 for both human and animal-health, and has seen encouraging data in canine osteosarcoma, which is considered a model for human osteosarcoma. Advaxis licensed ADXS-HER2 and three other immunotherapy constructs to Aratana Therapeutics, Inc. for pet therapeutics.