On November 9, 2015 Puma Biotechnology, Inc. (NYSE: PBYI), a biopharmaceutical company, reported financial results for the third quarter ended September 30, 2015 (Filing, 8-K, Puma Biotechnology, NOV 9, 2015, View Source [SID:1234508176]).

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Unless otherwise stated, all comparisons are for the third quarter and nine months ended September 30, 2015, compared to the third quarter and nine months ended September 30, 2014.

Based on accounting principles generally accepted in the United States (GAAP), Puma reported a net loss of $60.4 million, or $1.87 per share, for the third quarter of 2015, compared to a net loss of $35.9 million, or $1.19 per share, for the third quarter of 2014. Net loss for the nine months ended September 30, 2015 was $177.6 million, or $5.55 per share, compared to $94.5 million, or $3.16 per share, for the nine months ended September 30, 2014.

Non-GAAP adjusted net loss was $35.5 million, or $1.10 per share, for the third quarter of 2015, compared to $25.4 million, or $0.84 per share, for the third quarter of 2014. Non-GAAP adjusted net loss for the nine months ended September 30, 2015 was $104.3 million, or $3.26 per share, compared to $71.7 million, or $2.40 per share, for the nine months ended September 30, 2014. Non-GAAP adjusted net loss excludes stock-based compensation expense, which represents a significant portion of overall expense and has no impact on the cash position of the Company. For a reconciliation of GAAP net loss to non-GAAP adjusted net loss and GAAP net loss per share to non-GAAP adjusted net loss per share, please see the financial tables at the end of this news release.

Net cash used in operating activities for the third quarter of 2015 was $36.8 million. Net cash used in operating activities for the nine months ended September 30, 2015 was $121.4 million. At September 30, 2015, Puma had cash and cash equivalents of $23.6 million and marketable securities of $224.2 million, compared to cash and cash equivalents of $38.5 million and marketable securities of $102.8 million at December 31, 2014. Puma’s current level of cash and cash equivalents and marketable securities includes net proceeds of approximately $205.1 million from a public offering of the Company’s common stock, which was completed in January 2015.

"We continued to make significant progress with the neratinib clinical program in the third quarter," said Alan H. Auerbach, Chairman, Chief Executive Officer and President of Puma. "Puma achieved a number of milestones, including the presentation of additional data on patients with centrally confirmed HER2-positive disease from our Phase III ExteNET Trial at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2015 Breast Cancer Symposium and the publication in the Journal of the National Comprehensive Cancer Network of a patient with HER2 non-amplified (HER2-negative) metastatic breast cancer who also had a HER2 activating mutation and was successfully treated with PB272. We continue to anticipate filing for regulatory approval of PB272 for the extended adjuvant treatment of HER2-positive breast cancer in the first quarter of 2016.

"We anticipate a number of additional milestones through the end of 2015 and beyond. These include (i) presentations of additional data from the Phase III ExteNET Trial in the extended adjuvant treatment of early stage HER2-positive breast cancer (anticipated in the fourth quarter of 2015); (ii) publication of Phase III ExteNET Trial results (anticipated in the fourth quarter of 2015); (iii) presentation of the Phase II FB-7 trial of PB272 as a neoadjuvant treatment for patients with HER2-positive breast cancer (anticipated in the fourth quarter of 2015); (iv) presentation of data from our Phase II trial of PB272 in HER2 non-amplified breast cancer that has a HER2 mutation (anticipated in the fourth quarter of 2015); (v) reporting initial data from the Phase II trial of neratinib in extended adjuvant HER2-positive early stage breast cancer using loperamide prophylaxis (anticipated in the fourth quarter of 2015); (vi) publication of results to date on the use of prophylactic loperamide to reduce the neratinib-related diarrhea (anticipated in the fourth quarter of 2015); (vii) completing the ongoing Phase II trial of PB272 in patients with HER2-positive metastatic breast cancer that has metastasized to the brain (anticipated in the first half of 2016); and (viii) expanding additional cohorts in our Phase II basket trial of PB272 in patients with solid tumors with activating HER2 mutations (anticipated in the fourth quarter of 2015)."

Operating Expenses

Based on GAAP, operating expenses were $60.7 million for the third quarter of 2015, compared to $36.0 million for the third quarter of 2014. Operating expenses for the nine months ended September 30, 2015 were $178.2 million, compared to $94.7 million for the nine months ended September 30, 2014. The increase in operating expenses for the third quarter of 2015 compared to the third quarter of 2014 was primarily driven by an increase in stock-based compensation expense of $14.4 million, an increase in clinical trial expense of $5.1 million and an increase in internal research and development expense of $3.0 million. The increase in operating expenses for the nine months ended September 30, 2015 compared to the same period in 2014 was primarily driven by an increase in stock-based compensation of $50.5 million, an increase in clinical trial expense of $19.4 million and an increase in internal research and development expense of $8.2 million.

General and Administrative Expenses:

Based on GAAP, general and administrative expenses were $8.8 million for the third quarter of 2015, compared to $3.9 million for the third quarter of 2014. General and administrative expenses for the nine months ended September 30, 2015 were $22.2 million compared to $11.3 million for the nine months ended September 30, 2014.

Research and Development Expenses:

Based on GAAP, research and development expenses were $51.9 million for the third quarter of 2015, compared to $32.1 million for the third quarter of 2014. Research and development expenses for the nine months ended September 30, 2015 were $156.0 million, compared to $83.4 million for the nine months ended September 30, 2014.

On November 09, 2015 Portola Pharmaceuticals (Nasdaq:PTLA) reported a corporate update and reported its financial results for the third quarter ended September 30, 2015 (Press release, Portola Pharmaceuticals, NOV 9, 2015, View Source;p=RssLanding&cat=news&id=2110682 [SID:1234508172]).

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"We achieved a number of significant clinical, regulatory and manufacturing milestones over the past quarter," said William Lis, chief executive officer of Portola. "We completed enrollment in the APEX study of betrixaban, our Fast Track-designated product. For andexanet alfa, our breakthrough Factor Xa reversal agent, we initiated our rolling submission of our Biologics License Application, or BLA, to the U.S. Food and Drug Administration, or FDA. That comes on the heels of two important andexanet manufacturing milestones: we completed the commercial manufacturing process validation in support of our submission and commercial launch, and successfully scaled-up our first Generation 2 process, which will allow us to increase our production capacity at lower costs. These achievements keep us on track for our planned launch of andexanet alfa in 2016 followed by betrixaban in 2017, assuming clinical and regulatory success."

Other Recent Achievements, Upcoming Events and Milestones

Betrixaban

Completed APEX (Acute Medically Ill VTE Prevention with Extended Duration Betrixaban) study enrollment.
Successfully completed a sixth and final review of the APEX study Data and Safety Monitoring Committee, to correspond with an increase in sample size from 6,850 to 7,500 patients.
Received Fast Track designation from the FDA for prevention of VTE in acute medically ill patients.
APEX Study metrics, including pooled blinded aggregate event rates, remain on target.
Plan to report topline APEX study data late in the first quarter of 2016.

Plan to submit a New Drug Application to the FDA in 2016, subject to positive data.

Andexanet Alfa

Initiated rolling submission of BLA; we expect the application to be complete by the end of 2015 under Accelerated Approval pathway.

Completed commercial manufacturing process validation at CMC Biologics to support the BLA and commercial launch at 2,500 liter scale.

Successfully scaled up our first Generation 2, 10,000 liter batch product at Lonza.

Announced topline data from the second part of the Phase 3 ANNEXATM-R study, which demonstrated that andexanet alfa administered as an intravenous bolus followed by a continuous two-hour infusion produced rapid reversal of the anticoagulant effect of rivaroxaban and sustained it for the duration of the infusion. The full data set from Part 2 of the study will be presented during a Late-Breaking Clinical Trial session at the American Heart Association’s Scientific Sessions 2015 on November 11 in Orlando.
Enrollment remains on track in ANNEXA-4, a Phase 4 confirmatory study of patients receiving apixaban, rivaroxaban, edoxaban or enoxaparin who present with an acute major bleed.

Initiated a Phase 2 proof-of-concept study in healthy volunteers to evaluate the safety and efficacy of andexanet alfa in reversing the anticoagulant effect of betrixaban, and define the dose of betrixaban required for inclusion in ANNEXA-4.
Plan to present two abstracts at the American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting in December in Orlando.

Cerdulatinib – Oral, dual Syk/JAK kinase inhibitor for hematologic cancers

Continued to dose-escalate in the Phase 1 part of the ongoing Phase 1/2a study in patients with relapsed/refractory B-cell malignancies who have failed multiple therapies to determine the maximum tolerated dose. Exploring alternate dosing regiments and formulations to get to a higher exposure. Cerdulatinib continues to show activity and is well tolerated.
Plan to present three abstracts at the ASH (Free ASH Whitepaper) Annual Meeting in December in Orlando.

Corporate

Elected David C. Stump, M.D., former executive vice president, research and development, at Human Genome Sciences, Inc., to Portola’s board of directors.

Third Quarter Financial Results

Collaboration revenue earned under Portola’s collaborations with Bristol-Myers Squibb Company and Pfizer, Bayer Pharma and Janssen Pharmaceuticals, Daiichi Sankyo and Lee’s Pharmaceutical was $2.9 million for the third quarter of 2015 compared with $2.4 million for the third quarter of 2014.

Total operating expenses for the third quarter of 2015 were $58.5 million compared with $38.2 million for the same period in 2014. Total operating expenses for the third quarter of 2015 included $6.1 million in stock-based compensation expense compared with $2.2 million for the third quarter of 2014. Research and development expenses were $48.4 million for the third quarter of 2015 compared with $31.8 million for the third quarter of 2014 as the Company continued to support its manufacturing scale-up of andexanet alfa in preparation for BLA submission and commercial launch and work on its larger scale Generation 2 manufacturing process at Lonza; its Phase 3 and Phase 4 ANNEXA studies of andexanet alfa; completing enrollment in the Phase 3 APEX Study of betrixaban and its Phase 1/2a clinical study of cerdulatinib. Selling, general and administrative expenses for the third quarter of 2015 were $10.1 million compared with $6.4 million for the same period in 2014 as the Company increased headcount to support its growth, resulting in higher headcount-related costs including stock-based compensation expense, and increased pre-commercial launch activities.

Portola reported a net loss of $55.2 million, or $(1.05) net loss per share, for the third quarter of 2015 compared with a net loss of $35.8 million, or $(0.86) net loss per share, for the third quarter of 2014. Shares used to compute net loss per share attributable to common stockholders were approximately 52.6 million for the third quarter of 2015 compared with approximately 41.4 million for the same period in 2014.

As of September 30, 2015, cash, cash equivalents and investments totaled $356.0 million compared with cash, cash equivalents and investments of $392.3 million as of December 31, 2014.

On November 9, 2015 Merrimack Pharmaceuticals, Inc. (Nasdaq: MACK), a biopharmaceutical company that applies systems biology to develop cancer treatments and diagnostics, reported its third quarter 2015 financial results (Press release, Merrimack, NOV 9, 2015, View Source [SID:1234508166]). Merrimack will host a live conference call and webcast today, Monday, November 9 at 4:30 p.m., Eastern time, to provide an update on Merrimack’s progress as well as a summary of these results.

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Investors and the general public are invited to listen to the call by dialing (877) 564-1301 (domestic) or (224) 357-2394 (international) five minutes prior to the start of the call and providing the passcode 69525411. A listen-only webcast of the call can be accessed in the Investors section of Merrimack’s website, investors.merrimack.com, and a replay of the call will be archived there for six weeks following the call.

Key Recent Events

Approval of ONIVYDE (irinotecan liposome injection) by the U.S. Food and Drug Administration on October 22, 2015;
Commercial launch of ONIVYDE in the United States on October 26, 2015;

Enrollment of first patient in a Phase 2 clinical study of ONIVYDE in previously untreated front-line metastatic pancreatic cancer; and

Achievement of $66.5 million in net milestone payments from collaborations in 2015, consistent with Merrimack’s previous financial guidance.

Upcoming Milestones

Merrimack anticipates the following clinical milestones:

Initiation of a Phase 3 clinical study of ONIVYDE in front-line HER2-negative gastric cancer in 2016;

Results from the Phase 2 clinical study of MM-121 in patients with heregulin-positive, locally advanced or metastatic non-small cell lung cancer in the second half of 2016;

Results from the Phase 2 clinical study of ONIVYDE in previously untreated front-line metastatic pancreatic cancer in the first half of 2017;

Results from HERMIONE, the Phase 2 clinical study of MM-302 in patients with HER2-positive metastatic breast cancer designed to support a potential Accelerated Approval application to the FDA, in 2017; and

Results from the Phase 2 clinical study of MM-141 in patients with front-line metastatic pancreatic cancer who have high serum levels of free IGF-1 in 2017.

Third Quarter 2015 Financial Results

Revenue for the third quarter of 2015 was $16.4 million compared with revenue of $28.0 million for the third quarter of 2014, a decrease of $11.6 million or 41%. This decrease was primarily due to the termination of Merrimack’s collaboration with Sanofi effective December 17, 2014 and was offset by increased revenue recognized related to Merrimack’s collaboration with Baxalta during the third quarter of 2015.

Research and development expenses for the third quarter of 2015 decreased $5.9 million over the corresponding quarter of the preceding year. This decrease was primarily due to $12.0 million of non-recurring ONIVYDE collaboration milestones that were expensed in the third quarter of 2014. This decrease was offset by increased spending on Merrimack’s remaining pipeline.

General and administrative expenses for the third quarter of 2015 increased $8.9 million over the corresponding quarter of the preceding year. This increase was primarily attributable to increased infrastructure and personnel expenses as Merrimack prepared for the commercialization of ONIVYDE.

Merrimack’s net loss for the third quarter of 2015 was $42.4 million, or basic and diluted net loss per share available to common stockholders of $0.38, as compared to a net loss for the third quarter of 2014 of $28.0 million, or basic and diluted net loss per share available to common stockholders of $0.27.

Financial Outlook

Merrimack expects to be able to fund operations into the second quarter of 2016 based on the following:

– unrestricted cash and cash equivalents and available-for-sale securities of $62.4 million as of September 30, 2015;
– $47.5 million of milestones from Baxalta anticipated in the fourth quarter of 2015 related to the first patient dosed in the Phase 2 clinical study of ONIVYDE in previously untreated front-line metastatic pancreatic cancer; and
– anticipated cost sharing reimbursements from Baxalta.

Additional funding for operations would also come from:

– anticipated receipt of $46.5 million of net milestones related to ONIVYDE in 2016 from Baxalta, after offsetting payments to PharmaEngine;

– sales of ONIVYDE; and

– up to $15.0 million in additional debt that is currently available at Merrimack’s option under its loan agreement with Hercules Technology Growth Capital.

Upcoming Investor Conferences

Merrimack will attend the following investor conferences this fall:

Credit Suisse 24th Annual Healthcare Conference on November 11 in Scottsdale, AZ;
Jefferies Autumn 2015 Global Healthcare Conference on November 18 in London;
Oppenheimer 26th Annual Healthcare Conference on December 8 in New York; and
Guggenheim 3rd Annual Boston Healthcare Conference on December 15 in Boston.
Live webcasts of the presentations at the Credit Suisse 24th Annual Healthcare Conference, Jefferies Autumn 2015 Global Healthcare Conference and Oppenheimer 26th Annual Healthcare Conference can be accessed by visiting the Investors section of Merrimack’s website at investors.merrimack.com. A replay of the webcasts will be archived there for two weeks following each presentation.

On November 9, 2015 Intrexon Corporation (NYSE: XON), a leader in synthetic biology, reported its third quarter results for 2015 (Filing, 8-K, Intrexon, NOV 9, 2015, View Source [SID:1234508161]).

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Business Highlights and Recent Developments:

• During the third quarter, Intrexon and the biopharmaceutical business of Merck KGaA, Darmstadt, Germany, furthered research and development efforts with the collaboration’s first two chimeric antigen receptor (CAR) T-cell targets of interest and are advancing these targets to address unmet clinical needs for patients with hematological and solid tumor malignancies. In addition to CAR development, Intrexon is leveraging its engineering capabilities to develop an allogeneic cellular approach to address novel paradigms for "off the shelf" adoptive cell therapies;

• Acquired Oxitec Ltd., a company that has pioneered a targeted and innovative approach to control mosquitoes that spread disease and insect pests that damage crops, avoiding the off-target effects and broad environmental consequences of applying conventional insecticides. Addition of the Oxitec team expands Intrexon’s capabilities to address a broad range of global environmental, health and agricultural challenges in new and responsible ways;

• Completed work on an engineered cell line for Amneal Pharmaceuticals LLC to enable production of a complex active pharmaceutical ingredient (API) and the companies continue to explore other opportunities for future collaboration;

• Announced exclusive agreement between Intrexon Energy Partners (IEP) and Dominion Energy, a subsidiary of Dominion Resources (NYSE: D), to explore the potential for commercial-scale biological conversion of natural gas to isobutanol, a drop-in fuel with numerous advantages over other clean burning gasoline blendstocks. Dominion will be the exclusive partner to construct, own, operate, and maintain the production facilities in the Marcellus and Utica Shale Basins located in eastern North America via potential long-term services agreements with IEP;

• Established first Exclusive Channel Collaboration (ECC) with a startup backed by an investment fund that is dedicated to the inventions of Intrexon and sponsored by Harvest Capital Strategies, LLC. The collaboration with the startup entity, Thrive Agrobiotics, Inc., plans to utilize Intrexon’s ActoBiotics platform to express nutritive proteins for improving the overall growth and feed efficiency in piglets, thereby expanding the application of this innovative biologic delivery platform to animals;

• Expanded relationship with ZIOPHARM Oncology, Inc. (NASDAQ: ZIOP) through an ECC for the treatment and prevention of graft-versus-host disease (GvHD), a major complication of allogeneic hematopoietic stem-cell transplantation that significantly impairs the quality of life and survival of many recipients. The collaboration will focus on addressing the underlying pathologies of GvHD through engineered cell platforms to express and deliver interleukin-2 (IL-2), a cytokine critical for modulation of the immune system;
• Entered into an ECC with Synthetic Biologics, Inc. (NYSE MKT: SYN) to pursue the development and commercialization of novel biotherapeutics for the treatment of patients with phenylketonuria (PKU), a serious and debilitating metabolic disorder. The collaboration aims to target delivery of an essential enzyme via Intrexon’s ActoBiotics platform without having an adverse impact on the gut microbiome;

• With collaborator Fibrocell Science, Inc. (NASDAQ: FCSC) provided an update on the status of the Investigational New Drug (IND) application for FCX-007, Fibrocell’s orphan gene-therapy drug candidate for the treatment of the skin disorder recessive dystrophic epidermolysis bullosa (RDEB). At the request of the U.S. Food and Drug Administration (FDA), Fibrocell will conduct an additional toxicology-specific study and expects to amend the IND in response to the FDA’s feedback, including data from the new toxicology study, in the first quarter of 2016;

• Through wholly owned ViaGen Pets, announced successful feline cloning for customers and plans to launch broadly available companion animal service and product offering in 2016;

• Announced key management additions of Corey Huck as SVP, Head of Food Sector, and Joseph L. Vaillancourt, SVP, Head of Environment Sector; and

• Completed a public offering of common stock resulting in total gross proceeds of approximately $230 million, before deducting the underwriting discounts, commissions, and estimated expenses.
Third Quarter Financial Highlights:

• Total revenues of $53.4 million, an increase of 152% over the third quarter of 2014;

• Net loss of $38.2 million attributable to Intrexon, or $(0.34) per basic share;

• Adjusted EBITDA of $3.8 million, or $0.03 per basic share;

• Cash consideration received for reimbursement of research and development services covered 59% of cash operating expenses (exclusive of operating expenses of consolidated subsidiaries); and

• Cash, cash equivalents, and short-term and long-term investments totaled $352.6 million, and the value of equity securities totaled $76.6 million at September 30, 2015.
Year-to-Date Financial Highlights:

• Total revenues of $132.1 million, an increase of 224% over the nine months ended September 30, 2014;

• Net loss of $51.8 million attributable to Intrexon, or $(0.47) per basic share;

• Adjusted EBITDA of $43.6 million, or $0.40 per basic share;

• Distributed as a dividend to our shareholders equity securities having a market value of $172.4 million at the time of distribution;

• Total consideration received for technology access fees and reimbursement of research and development services covered 164% of cash operating expenses (exclusive of operating expenses of consolidated subsidiaries); and

• Total consideration received for technology access fees, reimbursement of research and development services and products and services revenues covered 135% of consolidated cash operating expenses.

"We continue to execute our plan and are satisfied with our progress to date," commented Randal J. Kirk, Chairman and Chief Executive Officer of Intrexon. "Now with approximately 700 team members working on many dozens of engineered biology projects across a vast array of organisms; programs that are world-leading in science and in industry; governmentally approved products that are being readied for market, products that are ready for approval and others that span every step of the developmental schedule; a recurrent and growing revenue base; a financial discipline that provides us with the capital efficiency to make long bets as well as surer bets; and a team that is fervent in its belief that we can improve the world while building one of its finest organizations, we believe we are seeing the engineering of biology emerging as the greatest industrial vector in history and clarifying Intrexon’s opportunity for a significant role in the world. We look forward to our upcoming Investor Day event and to the opportunity to showcase more of what we have achieved to date."

Third Quarter 2015 Financial Results Compared to Prior Year Period

Total revenues were $53.4 million for the quarter ended September 30, 2015 compared to $21.2 million for the quarter ended September 30, 2014, an increase of $32.2 million, or 152%. For the quarter ended September 30, 2015, Trans Ova product revenue includes $8.3 million from the sale of pregnant cows, live calves and livestock used in production and service revenue includes $7.3 million from the provision of in vitro fertilization and embryo transfer services. For the quarter ended September 30, 2014, these amounts were $3.8 million and $3.1 million, respectively. The increases relate primarily to the inclusion of a full quarter of results for Trans Ova in 2015 versus approximately one half-quarter of results for 2014 since the acquisition occurred during the middle of the third quarter of 2014. Collaboration and licensing revenues increased $22.1 million over the third quarter of 2014 due to (i) the recognition of deferred revenue for upfront payments received from Intrexon’s license and collaboration agreement with the biopharmaceutical business of Merck KGaA, which became effective in May 2015, and from other collaborations signed by Intrexon between October 1, 2014 and September 30, 2015, (ii) increased research and development services both for new collaborations and for the expansion of, or addition of new, programs with previously existing collaborators, and (iii) the recognition of previously deferred revenue related to collaboration agreements for which Intrexon satisfied all of its obligations or which were terminated by agreement during the quarter ended September 30, 2015.

Total operating expenses were $61.3 million for the quarter ended September 30, 2015 compared to $36.2 million for the quarter ended September 30, 2014, an increase of $25.1 million, or 69%. Research and development expenses were $21.6 million for the quarter ended September 30, 2015 compared to $14.9 million for the quarter ended September 30, 2014, an increase of $6.7 million, or 45%. Salaries, benefits and other personnel costs increased $3.1 million due to (i) increases in research and development headcount to support new and expanded collaborations and from Intrexon’s 2015 acquisitions and (ii) additional compensation expenses related to performance and retention incentives for research and development employees. Lab supplies and consultants increased $1.5 million as a result of the increased level of research and development services provided to Intrexon’s collaborators. Depreciation and amortization increased $1.3 million primarily as a result of acquiring property and equipment and intangible assets in connection with Intrexon’s acquisitions of ActoGeniX and Okanagan in 2015. Selling, general and administrative expenses were $23.0 million for the quarter ended September 30, 2015 compared to $14.9 million for the quarter ended September 30, 2014, an increase of $8.2 million, or 55%. Salaries, benefits and other personnel costs increased $4.1 million due to (i) the inclusion of selling, general and administrative employees of Trans Ova for the full quarter in 2015 compared to approximately one half-quarter in 2014 and (ii) additional compensation expenses related to performance and retention incentives for selling, general and administrative employees. Legal and professional expenses increased $1.4 million primarily due to costs associated with the Oxitec acquisition in 2015. Total operating expenses for the quarter ended September 30, 2015 also include $16.5 million of products and services costs which primarily consist of employee compensation costs, livestock, feed, drug supplies and facility charges related to the production of such products and services; this amount was $6.4 million for the quarter ended September 30, 2014. The increase relates primarily to the inclusion of a full quarter of results for Trans Ova in 2015 versus approximately one half-quarter of results for 2014 since the acquisition occurred during the middle of the third quarter of 2014.

Total other expense, net, was $29.6 million for the quarter ended September 30, 2015 compared to $37.2 million for the quarter ended September 30, 2014, a decrease of $7.6 million, or 20%. This decrease was primarily related to the changes in the value of Intrexon’s securities portfolio.

Year-to-Date 2015 Financial Results Compared to Prior Year Period

Total revenues were $132.1 million for the nine months ended September 30, 2015 compared to $40.8 million for the nine months ended September 30, 2014, an increase of $91.3 million, or 223%. For the nine months ended September 30, 2015, Trans Ova product revenue includes $28.4 million from the sale of pregnant cows, live calves and livestock used in production and service revenue includes $27.2 million from the provision of in vitro fertilization and embryo transfer services. For the nine months ended September 30, 2014, these amounts were $3.8 million and $3.1 million, respectively. The increases relate primarily to the inclusion of nine months of results for Trans Ova in 2015 versus approximately one half-quarter of results for 2014 since the acquisition occurred during the middle of the third quarter of 2014. Collaboration and licensing revenues increased $34.4 million due over the nine months ended September 30, 2014 due to (i) the recognition of deferred revenue for upfront payments received from Intrexon’s license and collaboration agreement with the biopharmaceutical business of Merck KGaA, which became effective in May 2015, and from other collaborations signed by Intrexon between January 1, 2014 and September 30, 2015, (ii) increased research and development services both for new collaborations and for the expansion or addition of new programs with previously existing collaborators, and (iii) the recognition of previously deferred revenue related to collaboration agreements for which Intrexon satisfied all of its obligations or which were terminated during the nine months ended September 30, 2015.

Total operating expenses were $244.6 million for the nine months ended September 30, 2015 compared to $91.8 million for the nine months ended September 30, 2014, an increase of $152.8 million, or 166%. Research and development expenses were $121.3 million for the nine months ended September 30, 2015 compared to $41.3 million for the nine months ended September 30, 2014, an increase of $80.0 million, or 193%. In January 2015, Intrexon issued 2,100,085 shares of its common stock valued at $59.6 million to the University of Texas MD Anderson Cancer Center, or MD Anderson, in exchange for an exclusive license to certain technologies owned by MD Anderson. Salaries, benefits and other personnel costs increased $9.0 million due to (i) increases in research and development headcount to support new and expanded collaborations and from Intrexon’s 2015 acquisitions and (ii) additional compensation expenses related to performance and retention incentives for research and development employees. Lab supplies and consultants expenses increased $5.6 million as a result of the increased level of research and development services provided to Intrexon’s collaborators. Depreciation and amortization expense increased $2.2 million primarily as a result of acquiring property and equipment and intangible assets in connection with Intrexon’s acquisitions of ActoGeniX and Okanagan in 2015.
Selling, general and administrative expenses were $74.3 million for the nine months ended September 30, 2015 compared to $43.9 million for the nine months ended September 30, 2014, an increase of $30.4 million, or 69%. Salaries, benefits and other personnel costs increased $17.5 million due to (i) the inclusion of selling, general and administrative employees of Trans Ova for a full nine months in 2015 compared to approximately one and one half months in 2014 and (ii) additional compensation expenses related to performance and retention incentives for general and administrative employees. Legal and professional expenses increased $4.1 million primarily due to costs associated with acquisitions, the license agreement with MD Anderson, and other business development activity. Depreciation and amortization associated with Trans Ova increased $2.0 million primarily due to the inclusion of such amounts for nine months in 2015 compared to one and one half months in 2014. Total operating expenses for the nine months ended September 30, 2015 also include $48.6 million of products and services costs which primarily consist of employee compensation costs, livestock, feed, drug supplies and facility charges related to the production of such products and services; this amount was $6.4 million for the nine months ended September 30, 2014. The increase relates primarily the inclusion of a full nine months of results for Trans Ova in 2015 versus approximately one half-quarter of results for 2014 since the acquisition occurred during the middle of the third quarter of 2014.

Total other income, net, was $65.1 million for the nine months ended September 30, 2015 compared to total other expense, net, of $49.0 million for the nine months ended September 30, 2014, an increase of $114.1 million, or 233%. This increase was primarily related to the changes in the value of Intrexon’s securities portfolio, including a realized gain of $81.4 million, which resulted from the special stock dividend of all of Intrexon shares of ZIOPHARM to the Company’s shareholders in June 2015.

On November 9, 2015 Halozyme Therapeutics, Inc. (NASDAQ: HALO), a biotechnology company developing novel oncology and drug-delivery therapies, reported financial results for the third quarter ended September 30, 2015 (Press release, Halozyme, NOV 9, 2015, View Source [SID:1234508158]). Revenue for the quarter of $20.8 million and a net loss of $24.5 million, or $0.19 per share, compared to revenue of $14.6 million and a net loss of $20.3 million, or $0.16 per share, for the third quarter of 2014. Financial results for the quarter were in line with company expectations and its annual financial guidance, which the company reiterated today.

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"With more than 100 patients now enrolled in Stage 2 of our Phase 2 study in pancreatic cancer patients, we are on track to close enrollment by the end of the year and achieve a major milestone toward our goal of ultimately commercializing PEGPH20," said Dr. Helen Torley, president and CEO. "Strong progress was made towards our goal of evaluating the pan tumor potential of PEGH20 by dosing the first patient in our immuno-oncology clinical trial in combination with Merck’s KEYTRUDA and by executing well on our broader clinical trial roadmap, including planning for initiation of our Phase 3 study in pancreatic cancer at the end of the first quarter of 2016.

"At the same time, our ENHANZE technology platform continued to deliver a growing royalty revenue stream from collaboration and licensing agreements with Roche and Baxalta, and we achieved important milestones toward potential future royalties with Pfizer, Janssen and AbbVie. Further progress was demonstrated by Pfizer and Janssen who initiated dosing in separate Phase 1 clinical trials with ENHANZE, while AbbVie announced plans to work with Halozyme on HUMIRA (adalimumab) with the goal to help reduce the number of induction injections and deliver additional performance benefits."

Third Quarter 2015 Highlights and Subsequent Events include:

Enrolling more than 100 patients to date in Stage 2 of Halozyme Study 202 of investigational new drug PEGPH20 in metastatic pancreatic ductal adenocarcinoma patients. Halozyme plans to complete its target enrollment of 114 patients by the end of 2015 and present results of the study in the second half of 2016.

Submitting Study 301 protocol to the FDA and European Regulatory Authorities. This Phase 3 study of PEGPH20 in previously untreated metastatic pancreatic cancer patients is planned for initiation by the end of first quarter 2016. Halozyme also made progress during the quarter with its partner Ventana toward completing a companion diagnostic test that will be used to prospectively screen patients for high levels of hyaluronan (HA). HA is a glycosaminoglycan, or chain of natural sugars in the body that accumulate around certain tumors. PEGPH20 is designed to temporarily degrade HA, improving the access of co-administered therapies.

Dosing the first patient in Halozyme’s Phase 1b study of PEGPH20 plus KEYTRUDA (pembrolizumab). The company is studying patients with relapsed/refractory Stage IIIB/IV non-small cell lung cancer and recurrent locally advanced or metastatic gastric adenocarcinoma. This trial is Halozyme-sponsored and is being conducted at a number of leading oncology centers with KEYTRUDA experience.

Progressing into a second dosing cohort in the Halozyme Phase 1b/2 PRIMAL study of PEGPH20 plus docetaxel in non-small cell lung cancer patients. Actions initiated during the quarter have resulted in an increase in the number of patients screened for the study. Once a maximum tolerated dose is determined, the company plans to expand the study with additional sites outside the U.S. and screen patients prospectively for trial eligibility based on high levels of HA.

Advancing Halozyme’s clinical collaboration with Eisai toward initiation of its Phase 1b/2 study in the first quarter of 2016. Halozyme and Eisai will co-fund the clinical trial to explore whether HALAVEN (eribulin) in combination with PEGPH20 can improve overall response rate, as compared with HALAVEN alone as a therapy for advanced HER2-negative high-HA metastatic breast cancer patients.

Achieving partner clinical milestones with the Halozyme ENHANZE technology platform, including Pfizer’s first dosing of healthy subjects with rivipansel and ENHANZE in a Phase 1 clinical trial; Janssen’s first dosing of the anti-CD38 daratumumab with ENHANZE in a Phase 1b clinical trial in multiple myeloma patients; and AbbVie announcing plans for HUMIRA a (adalimumab) under a collaboration and licensing agreement formed with Halozyme in June of 2015, with a goal to help reduce the number of induction injections at higher doses and deliver additional performance benefits.

Third Quarter 2015 Financial Highlights

Revenue for the third quarter was $20.8 million, compared to $14.6 million for the third quarter of 2014, driven primarily by an increase in royalties from partner sales of Herceptin SC, MabThera SC and HyQvia. Revenue for the quarter included $8.3 million in royalties, $6.3 million in sales of bulk rHuPH20 for use in manufacturing collaboration products, $3.9 million in HYLENEX recombinant (hyaluronidase human injection) product sales, and $2.2 million in collaboration revenue.

Research and development expenses for the third quarter were $27.6 million, compared to $19.9 million for the third quarter of 2014. The planned increase was primarily due to expenses for preclinical and clinical support of PEGPH20.

Selling, general and administrative expenses for the third quarter were $10.2 million, compared to $8.6 million for the third quarter of 2014. The increase was primarily due to an increase in personnel expenses, including stock compensation, for the period.
Net loss for the third quarter was $24.5 million, or $0.19 per share, compared to a net loss in the third quarter of 2014 of $20.3 million, or $0.16 per share.

Cash, cash equivalents and marketable securities were $123.7 million at Sept. 30, compared to $140.7 million at June 30, 2015.

Financial Outlook

For the full year 2015, the company maintains its previously announced guidance of:

Net revenues to be in the range of $110 million to $115 million;
Operating expenses to be in the range of $160 million to $170 million; and
Net cash burn to be between $20 million to $30 million.