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Flamel Technologies Reports Second Quarter 2016 Results

On August 8, 2016 Flamel Technologies (NASDAQ: FLML) reported its financial results for the second quarter 2016 (Filing, Q2, Flamel Technologies, 2016, AUG 8, 2016, View Source [SID:1234514499]).
Second Quarter Highlights Include:

· Total revenue for second quarter 2016 was $38.9 million, compared to $48.6 million during the same period last year.

· GAAP net loss for the second quarter was ($20.0) million, or ($0.48) per diluted share, compared to GAAP net loss of ($16.9) million, or ($0.42) per diluted share, during the same period last year.

· Adjusted EBITDA was $10.1 million, compared to $23.8 million in the prior year.*

· Adjusted net loss for the second quarter was ($985,000), or ($0.02) per diluted share, compared to an adjusted net income of $11.5 million, or $0.29 per diluted share, during the same period last year. *

· Cash and marketable securities at June 30, 2016 were $154.9 million, compared to $160.0 million at March 31, 2016 and $144.8 million at December 31, 2015.

· Akovaz received FDA approval on April 29, 2016 and is scheduled to launch in August 2016.

* Non-GAAP financial measure. Descriptions of Flamel’s non-GAAP financial measures are included under the caption "Non-GAAP Disclosures and Adjustments" included within this document and reconciliations of such non-GAAP financial measures to their most closely applicable GAAP financial measures are found in the "Supplemental Information" section within this document.

Michael Anderson, Flamel’s Chief Executive Officer, commented, "We are particularly pleased with our second quarter results. Bloxiverz averaged over 40% share of the neostigmine market during the quarter, and Vazculep continued to build share to 32% of the 1mL market volume, while holding all of the 5mL and 10mL markets. We generated revenue of $38.9 million for the quarter and we look forward to launching our third sterile injectable product, Akovaz, this month. We believe the market potential for Akovaz is the largest yet from our portfolio of previously unapproved marketed drugs, or UMDs."

Mr. Anderson continued, "In addition to our strong UMD business, we continue to advance our pipeline of proprietary products forward. We received positive data from our Phase 1b trial with Medusa exenatide and, following guidance from FDA, we will be conducting an alcohol interaction study in the second half of 2016 with our Trigger Lock hydromorphone product to further test its abuse-deterrent capabilities."

"In regards to our most important project, Micropump sodium oxybate, we have been in dialogue with FDA and look forward to finalizing the Special Protocol Assessment for our Phase III trial in the very near term. We continue to make all the necessary preparations associated with running the trial, including registering clinical sites and preparing clinical supplies, in order to hit the ground running once we begin patient enrollment. Our once nightly version of sodium oxybate is a very exciting opportunity for us, and we are on track to complete our study in approximately one year, with the goal of filing a New Drug Application by the end of 2017 or early 2018," concluded Mr. Anderson.

Second Quarter 2016 Results

The Company achieved revenues during the second quarter 2016 of $38.9 million, compared to $48.6 million during the same period last year. In the second quarter 2016, the Company determined that it is now able to estimate the ultimate net selling price of its products at the time of shipment from its warehouse. Previously, the Company was unable to completely estimate certain gross to net deductions that occur throughout the selling channel due to a lack of historical data. . This sales through accounting method resulted in an approximate one month lag between the time product was shipped from the Company’s warehouse until it reached the final customer. As a result of this change, the Company recorded approximately $5.9 million of additional revenue in the second quarter 2016.

On a GAAP basis, the Company recorded a net loss of ($20.0) million during the second quarter 2016, or ($0.48) per diluted share, compared to a net loss of ($16.9) million, or ($0.42) per diluted share, for the same period last year. Included in the net loss for the second quarter 2016 was $23.9 million of charges related to the change in the fair value of related party contingent consideration. Adjusted net loss for the second quarter was ($985,000), or ($0.02) per diluted share, compared to an adjusted net income of $11.5 million, or $0.29 per diluted share, during the same period last year. The decline in adjusted net income and adjusted diluted EPS from the previous year was due to lower product sales resulting from increased competition and higher SG&A from investments in infrastructure, people, and expenses related to the Company’s planned cross-border merger to Ireland from France. The Company recognized a foreign currency exchange gain of $1.7 million in the second quarter 2016, compared to a foreign currency exchange loss of ($3.6) million in the prior year quarter. Please see the Supplemental Information section within this document for a reconciliation of adjusted EBITDA, adjusted net income and adjusted diluted EPS to the respective GAAP amounts.

Sales for the FSC product line were below the Company’s expectations for the second quarter 2016 as the Company continues to work on improving product distribution, increasing third party payer access, and refining territories to maximize representative effectiveness. The Company expects to continue making progress throughout the remainder of the year in this business segment. It recently closed the Charlotte office facility and has strengthened the sales management team.

For the six months ended June 30, 2016 cash flow from operations was $15.9 million, compared to $40.3 million in the same period last year. Cash and marketable securities at June 30, 2016 were $154.9 million, compared to $160.0 million at March 31, 2016.

2016 Revenue and R&D Spending Guidance

As a result of the stronger than expected market share for Bloxiverz, slightly better expected market conditions for Akovaz and the change in the Company’s ability to better estimate net selling price upon shipment of product from its warehouse, the Company is increasing its full year 2016 revenue guidance to the range of $125 to $140 million from its previous guidance range of $110 to $130 million. The Company expects to allocate a substantial amount of its R&D expenses on its sodium oxybate trial; however, timing of the spend will be slightly shifted to 2017 and, as a result, has lowered its 2016 R&D spending guidance to the range or $30 to $40 million from the range of $35 to $50 million.

Clinical Pipeline Updates

Flamel received positive results from a Phase 1b clinical trial of FT228, a once-weekly subcutaneous injection formulation of exenatide using its proprietary Medusa technology. The study achieved all pharmacokinetic (PK) and pharmacodynamic (PD) objectives throughout four weekly administrations of Medusa exenatide (FT228), and assessed the safety, steady-state PK profile and the product’s potential effect on biomarkers and surrogate endpoints upon repeated administrations. Exenatide is a GLP1 analog used to treat patients suffering from Type 2 Diabetes Mellitus. Medusa is a hydrogel depot technology that enables the modified/controlled delivery of drugs, and is ideally suited to the development of subcutaneously administered formulations.

One dose per week of FT228 at 140mcg was administered to twelve Type 2 Diabetes Mellitus patients over a four week period. Following each administration, a continuous release of exenatide was observed over a period of up to 14 days and a relative bioavailability exceeding 94% was demonstrated. The PD performance of FT228 was comparable to current marketed products, Victoza (liraglutide IR) and Bydureon (exenatide SR).

In addition, Flamel received feedback from the U.S. Food and Drug Administration (FDA) regarding the clinical development pathway for FT227, an abuse-deterrent, extended-release, oral hydromorphone product using the Company’s proprietary Trigger Lock drug delivery platform.

To date, the Company has completed two pharmacokinetic (PK) studies of FT227 in 30 healthy volunteers, in addition to an independent in vitro study confirming FT227’s superior resistance to extraction/recovery in various media under several different conditions compared to both Exalgo and Oxycontin. Following guidance from the FDA, Flamel will be conducting during the third quarter of 2016 an in vivo alcohol interaction study, which the Company believes will provide further confirmation of the robust abuse-deterrent capabilities of Trigger Lock.

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Fortress Biotech Reports Second Quarter 2016 Financial Results and Recent Corporate Highlights

On August 9, 2016 Fortress Biotech, Inc. (NASDAQ: FBIO) ("Fortress"), a biopharmaceutical company dedicated to acquiring, developing and commercializing novel pharmaceutical and biotechnology products, reported its financial results and recent corporate highlights for the quarter ended June 30, 2016 (Press release, Fortress Biotech, AUG 8, 2016, View Source;FID=1500089727 [SID:1234514496]).

Dr. Lindsay A. Rosenwald, Chairman, President and CEO of Fortress, said, "During the second quarter of 2016, we attained several milestones, including the commercialization of our first two products from Journey Medical Corporation’s ("Journey") dermatology
franchise: Luxamend Wound Cream and Ceracade Skin Barrier Emulsion. Our subsidiary Checkpoint Therapeutics, Inc. ("Checkpoint Therapeutics") also acquired an exclusive, worldwide license to BRD4-inhibiting (from the Bromodomain and ExtraTerminal motif ("BET") inhibitor class of anti-cancer proteins) compounds for solid tumors from Jubilant Biosys Limited ("Jubilant"). In addition, Checkpoint Therapeutics entered a sublicense agreement with TG Therapeutics, Inc., a related party ("TG
Therapeutics"), to develop and commercialize the BRD4-inhibiting compounds for hematological malignancies, while Checkpoint Therapeutics retains the right to develop and commercialize these compounds for solid tumors. We believe clinical and corporate
developments such as these will help position us to diversify our pipeline during the second half of 2016."

Financial Results:
 At June 30, 2016, Fortress’ consolidated cash and cash equivalents totaled $71.3 million compared to $81.4 million at March 31, 2016 and $98.2 million as of December 31, 2015, a decrease of $10.1 million for the quarter, of which $6.6 million relates to our subsidiaries, and $26.9 million year-to-date, of which $16.1 million relates to our subsidiaries. These totals exclude restricted cash of $14.6 million.

 Total revenue for the second quarter of 2016 was $2.2 million consisting of $1.0 million of net product revenue from our subsidiary Journey and $1.2 million of collaboration revenue from a related party, compared with no revenue reported during
last year’s second quarter. $2.9 million in total revenue was reported for the first six months of 2016 consisting of $1.4 million of net product sales from Journey and $1.5 million of collaboration revenue from a related party, compared with $0.5 million of
collaboration revenue from a related party reported for the first six months of 2015.

 Research and development expenses were $6.3 million, of which $4.0 million relates to our subsidiaries for the second quarter of 2016 and $14.1 million, of which $9.0 million relates to our subsidiaries for the first six months of 2016. This compares with $2.4 million, of which $1.1 million relates to our subsidiaries for the second quarter of 2015 and $4.1 million, of which $1.2 million relates to our subsidiaries for the first six months of 2015. Noncash stock-based compensation expense included in research and development for the second quarter of 2016 was $1.1 million, compared to $0.6 million for the second quarter of 2015, and $2.4 million for the first six months of 2016, compared with $0.9 million for the first six months of 2015.

 Research and development licenses acquired expenses were $2.0 million for the second quarter of 2016 and $2.1 million for the first six months of 2016, compared to $1.5 million for the second quarter 2015 and $9.0 million for the first six months of 2015.

 General and administrative expenses were $8.6 million, of which $3.7 million relates to our subsidiaries for the second quarter of 2016 and $16.6 million, of which $6.6 million relates to our subsidiaries for the first six months of 2016, compared to $3.8 million, of which $0.3 million relates to our subsidiaries for the second quarter of 2015 and $7.3 million, of which $1.6 million relates to our subsidiaries for the first six months of 2015. Noncash stock-based compensation expense included in general
and administrative for the second quarter of 2016 was $1.9 million, compared to $1.3 million for the second quarter of 2015, and $3.5 million for the first six months of 2016, compared with $2.5 million for the first six months of 2015.

 Net loss was $12.5 million, or $0.31 per share, for the second quarter of 2016, compared to a net loss of $6.2 million, or $0.16 per share, for the second quarter of 2015. For the first six months of 2016, net loss was $24.7 million or $0.62 per share,compared with $18.2 million or $0.47 per share in the first six months of 2015.

Recent Corporate Highlights:
Avenue Therapeutics
 Avenue completed an End-of-Phase 2 ("EOP2") meeting with the FDA and, based on the outcome of the EOP2 meeting, Avenue anticipates that its Phase 3 program will consist of three studies: an efficacy and safety study in an orthopedic model, an
efficacy and safety study in a soft tissue model, and an open label safety study.

Checkpoint Therapeutics
 In May 2016, Jubilant and Checkpoint Therapeutics announced the signing of an exclusive, worldwide license agreement under which Jubilant out-licensed to Checkpoint Therapeutics a family of patents covering compounds that inhibit BRD4, a member of the BET domain for cancer treatment. In connection with the license agreement with Jubilant, Checkpoint Therapeutics entered into a sublicense agreement with TG Therapeutics to develop and commercialize the licensed compounds for hematological malignancies, while Checkpoint Therapeutics retains the right to develop and commercialize these compounds for solid tumors.

Journey Medical Corporation
 In June 2016, sales began for Luxamend Wound Cream and Ceracade Skin Barrier Emulsion, the first two products in Journey’s dermatology franchise. Both products were showcased at the 2016 American Academy of Dermatology (AAD)
Summer Meeting in July 2016.

 In July 2016, Journey received FDA approval for the manufacturing of a product for the treatment of acne, for which it had entered into a license and supply agreement in 2015. Journey expects sales of this product to begin in the fourth quarter of 2016.
Mustang Bio, Inc.
 In April 2016, Mustang announced that two abstracts pertaining to MB-101 (IL13Rα2‐specific CAR-T cells) for the treatment of glioblastoma were selected for presentation at the American Society of Gene and Cell Therapy’s 19th Annual Meeting ("ASGCT"). Pre-clinical and preliminary Phase I data were presented at ASGCT (Free ASGCT Whitepaper)

 In May 2016, an oral presentation related to MB-101 (IL13Rα2‐specific CAR-T cells) was presented by City of Hope investigators at the ASGCT (Free ASGCT Whitepaper) at the Marriott Wardman Park Hotel in Washington, DC.

Fortress Biotech
 On June 10, 2016, CB Pharma Acquisition Corp ("CB Pharma") held an extraordinary general meeting of its shareholders. At such meeting, the shareholders approved each of the following items: (i) an amendment to the CB Pharma’s Amended and Restated Memorandum and Articles of Association (the "Charter") to extend the date by which CB Pharma has to consummate a business combination from June 12, 2016 to December 12, 2016 (the "Extension"), (ii) an amendment to the Charter to allow the holders of the CB Pharma’s ordinary shares issued in the their initial public offering to elect to convert their shares into their pro rata portion of the funds held in trust, if the Extension is approved, and (iii) the change of CB Pharma’s name from "CB Pharma Acquisition Corp." to "Origo Acquisition Corporation" ("Origo"). In connection with the meeting, Fortress transferred 1,050,000 of its CB Pharma ordinary shares to Origo, retaining a holding of 265,000 Origo shares.

 In May 2016, positive data from the Phase 1/2 study of CNDO-109-Activated Allogeneic Natural Killer (NK) Cells in patients with acute myeloid leukemia were presented in an oral session at the Innate Killer Summit 2016 in San Diego, CA.

 In July 2016 Fortress’ stock was added to the Russell 2000 Index.

MannKind Corporation Reports 2016 Second Quarter Financial Results

On August 8, 2016 MannKind Corporation (Nasdaq:MNKD) (TASE:MNKD) reported financial results for the second quarter and the six months ended June 30, 2016 (Press release, Mannkind, AUG 8, 2016, View Source [SID:1234514495]).

For the second quarter ended June 30, 2016, total operating expenses were $19.1 million as compared to $24.1 million for the same quarter in 2015. Research and development expenses were $4.3 million for the second quarter of 2016, a decrease of 44% compared to the second quarter of 2015, primarily due to a reduction in force in 2015 following the completion of Afrezza registration trials. Selling, general and administrative costs were $11.1 million for the second quarter of 2016, an increase of 5% compared to general and administrative costs for the second quarter of 2015, mainly due to sales and marketing expenses.

Manufacturing of commercial product resumed in the second quarter of 2016, in preparation for the relaunch of Afrezza in the third quarter of 2016, resulting in the recognition of product manufacturing costs of $3.7 million for the three months ended June 30, 2016. With limited production and underutilization of the manufacturing facility in the same period of 2015, product manufacturing costs were $5.7 million for the second quarter of 2015 due to under absorbed labor and overhead.

For the first six months ended 2016, total operating expenses were $39.1 million, a decrease of 15% as compared to $45.8 million for the same period in 2015. Research and development expenses were $9.4 million for the six months ended June 30, 2016, a decline of 45% compared to the same period in 2015, primarily due to the reduction in force in 2015 and the transition from development to commercial activities. Selling, general and administrative expenses for the six months ended June 30, 2016 were $18.5 million, a decrease of 13% compared to the same period in 2015, primarily due to the reduction in force, reduced professional fees related to strategic planning activities and lower non-cash stock compensation expense in 2015, offset by increased sales and marketing expense in 2016. Product manufacturing costs were $11.2 million for the six months ended June 30, 2016, an increase of 47% compared to the same period in 2015, as manufacturing of commercial product resumed in preparation for the relaunch of Afrezza in the third quarter of 2016.

For the three months ended June 30, 2016, the Company earned $0.3 million under the Sanofi License Agreement, which is required to be applied as a prepayment against the balance owed under the Sanofi Loan Facility. As of June 30, 2016, the total amount owed to Sanofi is $70.3 million, which includes accrued interest of $4.3 million.

Included in net loss for the three and six months ended June 30, 2016 is the non-cash effect of a $5.3 million fair value adjustment of the warrant liability related to the registered direct public offering completed in May 2016.

The net loss for the second quarter of 2016 was $30.0 million, or $0.07 per share, based on 455.3 million weighted average shares outstanding, compared with to the net loss of $28.9 million, or $0.07 per share, based on 401.0 million weighted average shares outstanding for the second quarter of 2015. The number of common shares outstanding at June 30, 2016 was 477.7 million.
Cash and cash equivalents at June 30, 2016 were $63.7 million, compared to $27.7 million at March 31, 2016. In May 2016, the Company received net proceeds of $47.4 million upon completion of a registered direct public offering, $9.2 million from Sanofi for the sale of insulin inventory in connection with a contractual obligation upon termination of the Sanofi License Agreement, and $0.7 million from Connecticut as a Research & Development tax credit. Currently, $30.1 million remains available for borrowing under the amended loan arrangement with The Mann Group along with $50.0 million available under the ATM facility.

8-K – Current report

On August 8, 2016 FibroGen, Inc. (NASDAQ: FGEN) ("FibroGen"), a research-based biopharmaceutical company, reported financial results for the quarter ended June 30, 2016 (Filing, Q2, FibroGen, 2016, AUG 8, 2016, View Source [SID:1234514414]).

"We continue to develop our multiple key programs across focused therapeutic areas," said Thomas B. Neff, chief executive officer of FibroGen. "Working jointly with our partners, Astellas and AstraZeneca, we have advanced global clinical development for roxadustat for treatment of anemia in chronic kidney disease patients to Phase 3 in four independent regulatory pathways − the U.S., Europe, China, and Japan − and remain on track to initiate new drug application submissions in 2016 in China, and in 2018 in the U.S. We have completed enrollment in the placebo-controlled portion of our Phase 2 study of FG-3019 (now known as pamrevlumab) for treatment of idiopathic pulmonary fibrosis, and expect to report data from this study in the middle of next year, and our Phase 2 studies in pancreatic cancer and Duchenne muscular dystrophy continue to progress."
Program Updates
Anemia of Chronic Kidney Disease (CKD): roxadustat (FG-4592)

·
China Phase 3 enrollment on track: Completed enrollment in a 300-patient dialysis study, one of two Phase 3 pivotal trials in China; expect to complete enrollment in the second study, a 150-patient non-dialysis study now over 70% enrolled, in Q3 of this year. We expect first reportable data in each of the Phase 3 studies by the end of the year.

·
The independent data safety monitoring board overseeing roxadustat U.S and Europe Phase 3 studies met in July 2016 to review the roxadustat safety data, and confirmed that the trials should proceed with current Phase 3 protocols without modification.

·
Continue to expect to initiate new drug application submissions for roxadustat in 2016 for China and in 2018 for the U.S.
Fibrosis and Other Fibroproliferative Diseases: pamrevlumab (FG-3019)

·
Completed enrollment in the 48-week main study portion of a placebo-controlled Phase 2 trial for treatment of IPF. We plan to report topline data for the entire study in mid-2017, including the six month combination therapy sub-study in which patients will receive pamrevlumab in combination with pirfenidone or nintedanib, which will continue to enroll until the end of the year.

·
Continue to advance our Phase 2 trial in patients with unresectable, locally advanced pancreatic cancer, and anticipate that we will present available findings early next year.

·
Enrollment continues in our open-label Phase 2 study of pamrevlumab in non-ambulatory Duchenne muscular dystrophy (DMD) patients.
Financial Highlights

·
Net income per basic share for the quarter ended June 30, 2016, was $0.39, and $0.35 on a per diluted share basis.

·
At June 30, 2016, FibroGen had $368.6 million of cash, cash equivalents, investments, receivables, and restricted cash.

·
During the quarter ended June 30, 2016, we received a $62.0 million upfront payment under the AstraZeneca Agreement. We also recognized $10.0 million milestone revenue under the Astellas Agreement, which payment was received in early July 2016.

ChemoCentryx Reports Second Quarter 2016 Financial Results and Provides Corporate Update

On August 8, 2016 ChemoCentryx, Inc., (Nasdaq:CCXI), a clinical-stage biopharmaceutical company developing orally-administered therapeutics to treat autoimmune diseases, inflammatory disorders and cancer, reported financial results for the second quarter ended June 30, 2016 and provided an update on the Company’s clinical development activities (Press release, ChemoCentryx, AUG 8, 2016, View Source [SID:1234514396]).

"The positive results from the CLASSIC trial with CCX168 mark the successful culmination of our AAV Phase II program and we now look forward to initiating Phase III development of CCX168 in AAV," said Thomas J. Schall, Ph.D., President and Chief Executive Officer of ChemoCentryx. "We also anticipate reporting initial results from our ongoing trial of CCX872 in patients with pancreatic cancer during the second half of this year. We are very pleased to have achieved such important clinical, regulatory and business development goals thus far in 2016 and with them, the added validation of our approach to treating autoimmune diseases, inflammatory disorders and cancer. We look forward to building on that momentum as we enter the second half of the year."

Pipeline Developments Across Key Therapeutic Areas

Orphan and Rare Diseases: CCX168 is an orally-administered complement inhibitor targeting the C5a receptor (C5aR), and is being developed for several rare disease indications, including ANCA-associated vasculitis (AAV) and atypical hemolytic uremic syndrome (aHUS). CCX168 acts by blocking the destructive action of neutrophils that are activated as a consequence of the complement protein known as C5a binding to C5aR on neutrophils during autoimmune inflammatory events including the destruction of blood vessels in AAV.

Reported positive top-line results from the Phase II CLASSIC trial with CCX168 in patients with AAV. The goal of the CCX168 development program in AAV is to reduce or eliminate the use of chronic high dose glucocorticosteroids (steroids) in the current standard of care (SOC) treatment. To inform potential regulatory queries and eventual labeling requirements for CCX168 in AAV, the Phase II CLASSIC study was designed largely to assess the safety profile of CCX168 when added to the current SOC. The CLASSIC safety trial met its objectives as follows:
The addition of CCX168 to current SOC therapy did not add safety concerns beyond those seen with SOC alone. The incidence of serious adverse events (SAEs) was similar across treatment groups in the study and consistent with effects related to background therapy.
While the CLASSIC safety study was not designed or powered for inferential statistical analyses on efficacy, the Birmingham Vasculitis Activity Score (BVAS) response endpoint was numerically superior in patients who received CCX168, and rapid BVAS remission (BVAS = 0 at week 4) was also seen in patients receiving the clinically relevant 30 mg dose of CCX168 + SOC (5 of 15 patients) vs. SOC alone (2 of 13 patients) and SOC + 10 mg CCX168 (1 of 12 patients).
Announced exclusive regional license agreement with Vifor Pharma to commercialize CCX168 in Europe and certain other markets. The agreement included $85 million upfront payment to ChemoCentryx, comprising $60 million in cash in addition to $25 million equity investment from Vifor Pharma. ChemoCentryx retains all ongoing and future development of CCX168, other than country-specific development in the licensed territories, as well as commercialization rights to CCX168 in the United States and other countries not licensed to Vifor Pharma.
Granted PRIority MEdicines (PRIME) designation by the European Medicines Agency (EMA) for CCX168 for the treatment of AAV. PRIME provides enhanced scientific guidance and supports accelerated review of investigational therapies that show the potential to benefit patients with unmet medical needs based on clinical data.
Awarded a U.S. Food and Drug Administration (FDA) Orphan Products Development one-year grant of $500,000 to assist in the clinical development of CCX168 for treatment of AAV.
Presented positive results from the Phase II CLEAR trial at the European Renal Association – European Dialysis and Transplant Association (ERA-EDTA) Congress. The CLEAR trial met its primary endpoint based on the BVAS response at week 12 in patients receiving CCX168, compared to those patients receiving the high dose steroid-containing SOC. Specifically, all treatment groups receiving CCX168 demonstrated a numerically superior, statistically significant (P=0.002) non-inferior clinical efficacy outcome when compared to SOC.
Presented preclinical data at the ERA-EDTA Congress which used CRISPR-Cas9 technology to create novel murine models of complement over activation and C5a generation, as found in aHUS and C3 glomerulopathy (C3G), and found evidence of impaired renal function in these mice.
Immuno-Oncology: CCX872 is a potent and selective inhibitor of the chemokine receptor known as CCR2, and is the Company’s most advanced drug candidate that is designed to block the infiltration of immune suppressor cells in the tumor microenvironment. CCX872 is being evaluated in patients with non-resectable pancreatic cancer in an ongoing, multi-center clinical trial. The primary outcome measurement of the study is progression-free survival (PFS) after at least 24 weeks of treatment. Overall response rate after 12 weeks of treatment will also be evaluated. ChemoCentryx is conducting earlier stage research with various chemokine receptor inhibitors, such as CCX9588, an inhibitor of the chemokine receptor known as CCR1, in combination with checkpoint inhibitors. The Company’s immuno-oncology efforts further include research to identify potential drug candidates targeting additional receptors that are believed to play an important role in the tumor microenvironment.

Advanced Phase Ib pancreatic cancer trial of CCR2 inhibitor CCX872 in combination with FOLFIRINOX; and
Identified preclinical candidates that target CXCR2 and CXCR7, two receptors that are believed to play an important role in the tumor microenvironment.
Other Inflammatory and Autoimmune Diseases: Research suggests that a type of T cells known as Th-17 cells, which produce the pro-inflammatory cytokine IL-17, are involved in the origin and development of many autoimmune diseases, including psoriasis. It is thought that therapeutic solutions to Th-17 driven autoimmune diseases could include inhibiting CCR6 inhibitor, and ChemoCentryx has produced several unique CCR6 inhibitor candidates and demonstrated that Th-17 cells are regulated by CCR6.

Presented preclinical data demonstrating that novel CCR6 inhibitors developed by ChemoCentryx have efficacy in models of psoriasis and achieved equivalent results when compared to an antibody to the IL-17 receptor. These novel CCR6 inhibitors reduced skin inflammation in models of psoriasis, and reduced the number of IL-17-secreting T cells in psoriatic skin. These results were presented at the 2016 Society for Investigational Dermatology Annual Meeting.
Anticipated Milestones

Orphan and Rare Diseases:

Evaluate formal feedback from End of Phase II and scientific advice meetings with U.S. and EU regulatory agencies and formalize the CCX168 AAV Phase III development plan in the second half of 2016;
Initiate Phase III development program with CCX168 for the treatment of AAV by the end of 2016; and
Report early results from the Phase II pilot study of CCX168 in aHUS patients who are on dialysis in late 2016.
Immuno-Oncology:

Report overall response rate and initial PFS data from pancreatic cancer trial of CCX872 in combination with FOLFIRINOX in the third and fourth quarter 2016, respectively.
Chronic Kidney Disease:

Review End of Phase II meeting plans and a potential Phase III clinical development program for CCX140 in diabetic nephropathy in the context of a partnership.
Second Quarter 2016 Financial Results and Outlook

Cash, cash equivalents and investments totaled $139.9 million at June 30, 2016, and include the $85.0 million upfront payment received in connection with the partnership with Vifor Pharma announced during the second quarter.

Revenue was $2.8 million for the three months ended June 30, 2016 compared to zero in the same period in 2015. The increase in revenue from 2015 to 2016 was due to: (i) amortization of the upfront payment from Vifor Pharma and (ii) grant revenue from the FDA to support the clinical development of CCX168 for the treatment of patients with AAV.

Research and development expenses were $9.1 million for the three months ended June 30, 2016 compared to $8.6 million reported for the same period in 2015. The increase in research and development expenses from 2015 to 2016 was primarily attributable to higher expenses associated with CCX872, our second generation CCR2 inhibitor, following the completion of enrollment of our clinical trial in patients with advanced pancreatic cancer. This increase was partially offset by lower expenses associated with CCX168, our C5aR inhibitor, due to the completion of the CLEAR Phase II clinical trial in Europe for the treatment of AAV and the completion of the treatment period in the CLASSIC Phase II clinical trial for the same in North America in 2016.

General and administrative expenses were $3.9 million for the three months ended June 30, 2016 compared to $3.6 million for the comparable period in 2015. The increase from 2015 to 2016 was primarily due to higher intellectual property related expenses and travel and professional fees associated with our business development efforts.

Net loss was $10.0 million for the second quarter ended June 30, 2016 compared to $12.1 million in the same period in 2015.

Total shares outstanding at June 30, 2016 were approximately 47.8 million shares.

About ANCA-Associated Vasculitis and Other Rare Renal Diseases

Anti-neutrophil cytoplasmic antibody (ANCA)-associated vasculitis, or AAV, is a type of rare autoimmune inflammation caused by auto-antibodies. AAV encompasses granulomatosis with polyangiitis (GPA, formerly known as Wegener’s granulomatosis), microscopic polyangiitis (MPA), eosinophilic polyangiitis (formerly Churg-Strauss syndrome) and renal limited vasculitis.

AAV represents a severe and often fatal autoimmune disease that is characterized by inflammation that can destroy different organ systems. AAV is the lead indication in the Company’s orphan and rare disease program which has the objective of eliminating chronic high dose steroids, which are associated with significant safety issues including death, from the standard of care (SOC) regimen in AAV and replace steroids with CCX168.

AAV affects approximately 40,000 people in the U.S. (with approximately 4,000 new cases each year) and greater than 75,000 people in Europe (with at least 7,500 new cases each year), and is currently treated with courses of immuno-suppressants (cyclophosphamide or rituximab) combined with high dose steroid administration. Following initial treatment, up to 30 percent of patients relapse within six to 18 months, and approximately half of all patients will relapse within three to five years.

Current SOC for AAV is associated with significant safety issues. First year mortality is approximately 11 to 18 percent. The single major cause of premature mortality is not disease-related adverse events, but rather infection that is thought largely to be a consequence of steroid administration. Indeed, the multiple adverse effects of courses of steroid treatment (both initial courses and those that are repeated as a consequence of relapse) are major causes of both short-term and long-term disease and death. Such therapy related adverse events contribute significantly to patient care costs, as well as to the diminution of quality of life for patients.

By damaging the body’s small blood vessels, AAV affects many organ systems, mostly the kidneys, eyes, lungs, sinuses and nerves. This damage is caused by the destructive activity of inflammatory leukocytes in the body, with neutrophils considered to be the terminal effector cell. In AAV, neutrophils are attracted to sites of vascular destruction as well as activated at those sites by the activity of the complement system product known as C5a and its receptor, C5aR, which is the target of CCX168. By blocking the C5aR, CCX168 is thought to reduce vasculitis by reducing neutrophil activation, accumulation, and adhesion, as well as vascular permeability.

Atypical hemolytic uremic syndrome, or aHUS, an ultra-rare, life threatening disease that causes chronic blood vessel damage, thrombosis or clotting within blood vessels, hemolysis or red blood cell rupture, and sudden, progressive organ failure, such as kidney failure. The disease is caused by genetic defects in factors that control the activation of the complement system. Current treatment options are still quite limited and prognosis and quality of life are extremely poor.

About Pancreatic Cancer

It is estimated that over 337,000 cases of pancreatic cancer are diagnosed worldwide every year, accounting for 2.4 percent of all cancers. The incidence of pancreatic cancer in the U.S. is about 45,000, with prevalence being only negligibly higher owing to the poor survival rates on current therapy. Current standards of care include surgical resection and chemotherapeutic regimens such as gemcitabine and FOLFIRINOX. These regimens are limited by marked toxicities. Almost 67 percent of cases are diagnosed in people aged 65 and over. In the U.S., pancreatic cancer is the fourth most common cause of deaths due to cancer. Pancreatic cancer has a low survival rate regardless of stage of disease, with 93 percent of patients dying from their disease within five years.