- Net product revenue from sales of Iclusig were $65.3 million for the second quarter of 2016, compared to $27.8 million in the second quarter of 2015; and $99.0 million for the first half of 2016, compared to $51.7 million for the first half of 2015. Net product revenue in the quarter and six months ended June 30, 2016 includes one-time revenue of approximately $25.5 million related to cumulative shipments of Iclusig in France that were recorded upon obtaining pricing and reimbursement approval in May 2016.
- U.S. sales of Iclusig were $32.6 million for the second quarter of 2016, compared to $21.7 million in the second quarter of 2015, representing growth of 50 percent; and $57.6 million for the first half of 2016, compared to $40.4 million for the first half of 2015, representing growth of 43 percent.
- European sales of Iclusig were $32.7 million for the second quarter of 2016, compared to $6.1 million in the second quarter of 2015, representing growth of 436 percent; and $41.4 million for the first half of 2016, compared to $11.3 million for the first half of 2015, representing growth of 266 percent. European sales for the second quarter of 2016 included the one-time French revenue of $25.5 million noted above and approximately $7.2 million of product revenue in the first two months of the second quarter of 2016. On June 1, 2016, ARIAD out-licensed the rights to Iclusig in Europe to Incyte Corporation (Incyte). From June 1, 2016, ARIAD records royalty revenue based on tiered royalty rates from Iclusig sales in Europe recognized by Incyte.
Non-GAAP net income for the quarter ended June 30, 2016 was $114.1 million, or $0.59 per diluted share, compared to non-GAAP net loss of $52.5 million, or $0.28 per diluted share for the quarter ended June 30, 2015. Non-GAAP net income for the six months ended June 30, 2016 was $69.9 million, or $0.36 per diluted share, compared to non-GAAP net loss of $96.8 million, or $0.51 per diluted share, for the six months ended June 30, 2015.Non-GAAP net loss excludes stock-based compensation, restructuring charges for a reduction in force in March 2016 and transaction costs for the Incyte transaction. See "Use of Non-GAAP Financial Measures" below for a description of non-GAAP financial measures and the reconciliation between GAAP and non-GAAP measures at the end of this press release. Operating Expenses
- R&D expenses were $42.9 million for the second quarter of 2016, an increase of $4.2 million or 10.6 percent, compared to $38.7 million for the second quarter of 2015. R&D expenses were $86.9 million for the first half of 2016, an increase of $8.7 million or 11.2 percent compared to $78.2 million for the first half of 2015.
- Selling, general and administrative expenses were $34.2 million for the second quarter of 2016, a decrease of $14.4 million or 29.6 percent, compared to $48.6 million for the second quarter of 2015. Selling, general and administrative expenses were $70.2 million for the first half of 2016, a decrease of $12.0 million or 14.5 percent, compared to $82.2 million for the first half of 2015.
- For the second quarter and half year ended 2016, other income (expense), net includes a recorded gain on the Incyte transaction of $128.7 million.
- As of June 30, 2016, cash, cash equivalents and marketable securities totaled $278.5 million, compared to $168.3 million at March 31, 2016 and $242.3 million at December 31, 2015.
- On June 1, 2016, ARIAD completed the sale of its European operations to Incyte Corporation, as well as an exclusive license under which Incyte will commercialize Iclusig in Europe and other select countries. ARIAD received approximately $140 million at the closing and will receive 32-50 percent of European net sales going forward.
- ARIAD also completed two distribution agreements for Iclusig outside of the U.S. In Latin America, our agreement with Pint Pharma International S.A. covers Argentina, Brazil, Chile, Colombia and Mexico. In the Middle East and North Africa (MENA), our agreement with Biologix FZCo. covers Saudi Arabia, the Gulf Coast countries, Lebanon, and selected other countries in the region. Under these agreements ARIAD will receive more than 50 percent of Iclusig net sales moving forward.
- Long-term safety and efficacy data from the PACE clinical trial were presented in June at the European Hematology Association (EHA) meeting. The study shows that Iclusig continued to demonstrate anti-leukemic activity in chronic phase chronic myeloid leukemia (CP-CML) patients treated with Iclusig, with a median follow-up of 4.0 years. Additionally, 96 percent of CP-CML patients who underwent Iclusig dose reductions while in response maintained their responses (major cytogenetic response [MCyR]) at the four-year time point.
- ARIAD has submitted the four-year PACE data to the FDA and other health authorities as a label supplement, with an FDA action date in the fourth quarter of this year.
- Patient enrollment is ongoing in the OPTIC and OPTIC-2L clinical trials in patients with resistant CP-CML.
- Otsuka Pharmaceutical Co., Ltd. (Otsuka) submitted a new drug application (NDA) to the Japanese Pharmaceuticals and Medical Devices Agency (PMDA) seeking approval for Iclusig for the treatment of resistant or intolerant chronic myeloid leukemia (CML) and Philadelphia-chromosome positive acute lymphoblastic leukemia (Ph+ALL). This marketing application was submitted in early 2016, with an anticipated action date in third quarter 2016, and reimbursement and launch expected in late 2016 or early 2017.
- ARIAD initiated the New Drug Application (NDA) submission for brigatinib to the FDA for patients with ALK+ non-small cell lung cancer (NSCLC) who are resistant to crizotinib. The Company will be seeking accelerated approval for brigatinib from the FDA and plans to request a priority review of the application. We anticipate completion of the rolling submission in the third quarter of this year.
- Clinical data from the Phase 2 ALTA trial of brigatinib were the subject of an oral presentation at the annual meeting of the American Society of Clinical Oncology (ASCO). The data show that, of patients on the 180 mg regimen (Arm B) with a median follow-up of 8.3 months, 54 percent achieved a confirmed objective response, the trial's primary endpoint. In this arm, the median progression free survival (PFS) exceeded one year (12.9 months) in this post-crizotinib setting. Additionally, a 67 percent confirmed intracranial objective response rate (ORR) was achieved in patients with measurable brain metastases.
- Other brigatinib data presented at ASCO included more mature efficacy and safety data from the long-term Phase 1/2 trial follow-up, with median time on treatment now at 17 months in ALK+ NSCLC patients and the longest time on treatment now more than 3.5 years. Also, clinical data were presented from molecular analysis of ALK+ NSCLC patients in both the ALTA and Phase 1/2 trials, showing confirmed responses in patients with different secondary ALK mutations, including one G1202R case. There are no currently approved ALK treatments that have demonstrated activity against the G1202R mutation.
- The ALTA 1L randomized, front-line clinical trial of brigatinib opened to patient enrollment in early April and patient enrollment is underway. This global, Phase 3 trial is designed to compare brigatinib and crizotinib in patients with ALK+ NSCLC who have not received prior ALK inhibitors. Full enrollment is expected in 2018.
- In the U.S. an Expanded Access Program is now open to provide brigatinib access to eligible patients with ALK+ NSCLC who are resistant or intolerant to at least one prior ALK TKI. In Europe, an Early Access Program is being established.
- At ARIAD's Analyst and Investor Day in June, the Company detailed its decision to invest in potential new opportunities in immuno-oncology, which leverages its core competency in kinase inhibitors for precision therapies to explore the potential for small molecules in immuno-oncology. ARIAD has achieved genetic and pharmacologic validation on an initial target kinase, with the program anticipated to enter lead optimization by the end of 2016.
- The Phase 1/2 trial of ARIAD's investigational kinase inhibitor AP32788 is now enrolling patients at multiple sites in the U.S. AP32788 targets tumors driven by EGFR or HER2 kinases and was designed to achieve selective inhibition of exon 20 mutations in these kinases. ARIAD estimates that there are approximately 6,000 patients in the U.S. living with EGFR exon 20 or HER2 point mutations.
- European School of Haematology (ESH)/ International Chronic Myeloid Leukemia Foundation (iCMLf), Houston, September 15 to September 18, 2016
- European Society for Medical Oncology (ESMO), Copenhagen, Denmark, October 7 to October 11, 2016
- Japanese Society of Hematology (JSH), Yokohama City, Japan, October 13 to October 15, 2016
Iclusig is approved in the U.S., EU, Australia, Switzerland, Israel and Canada.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 acute lymphoblastic 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.
- Vascular Occlusion: Arterial and venous thrombosis and occlusions have occurred in at least 27% of Iclusig treated patients, including fatal myocardial infarction, stroke, stenosis of large arterial vessels of the brain, severe peripheral vascular disease, and the need for urgent revascularization procedures. Patients with and without cardiovascular risk factors, including patients less than 50 years old, experienced these events. Monitor for evidence of thromboembolism and vascular occlusion. Interrupt or stop Iclusig immediately for vascular occlusion. A benefit risk consideration should guide a decision to restart Iclusig therapy.
- Heart Failure, including fatalities, occurred in 8% of Iclusig-treated patients. Monitor cardiac function. Interrupt or stop Iclusig for new or worsening heart failure.
- Hepatotoxicity, liver failure and death have occurred in Iclusig-treated patients. Monitor hepatic function. Interrupt Iclusig if hepatotoxicity is suspected.
The items included in GAAP presentations but excluded for purposes of determining non-GAAP financial measures for the periods presented in this press release are:
- Stock-based compensation expense: The Company has excluded the impact of stock-based compensation, which may fluctuate from period to period based on factors including the timing and accounting of grants for stock options, restricted stock units and performance- based stock units and changes in the Company's stock price which impacts the fair value of these awards.
- Restructuring charge expense: The Company has excluded restructuring charge expenses associated with employee workforce reductions because apart from ongoing expense savings as a result of such items, these expenses have no direct correlation to the operation of our business in the future.
- Transaction related cost: The Company has excluded transaction costs related to the Incyte transaction because they relate to a specific transaction and are not reflective of our ongoing financial performance.
Forward-Looking StatementsThis press release contains forward-looking statements, each of which are qualified in their entirety by this cautionary statement. Any statements contained herein which do not describe historical facts, including, but not limited to the statements related to the anticipated timing of potential regulatory actions and research and clinical development plans and milestones for our product candidates, along with the statements made by our Chief Executive Officer, are forward-looking statements that are based on management's expectations and are subject to certain factors, risks and uncertainties that may cause actual results, outcome of events, timing and performance to differ materially from those expressed or implied by such statements. These factors, risks and uncertainties include, but are not limited to, our ability to successfully commercialize and generate profits from sales of Iclusig and our product candidates, if approved; competition from alternative therapies; our ability to meet anticipated clinical trial commencement, enrollment and completion dates and regulatory filing dates for our products and product candidates and to move new development candidates into the clinic; our ability to execute on our key corporate initiatives; regulatory developments and safety issues, including difficulties or delays in obtaining regulatory and pricing and reimbursement approvals to market our products; our reliance on the performance of third-party manufacturers, specialty pharmacies, distributors and other collaborators for the supply, distribution, development and/or commercialization of our products and product candidates; the occurrence of adverse safety events with our products and product candidates; the costs associated with our research, development, manufacturing, commercialization and other activities; the conduct, timing and results of preclinical and clinical studies of our products and product candidates, including that preclinical data and early-stage clinical data may not be replicated in later-stage clinical studies; the adequacy of our capital resources and the availability of additional funding; the ability to satisfy our contractual obligations, including under our leases, convertible debt and royalty financing agreements; patent protection and third-party intellectual property claims; litigation; our operations in foreign countries with or through third parties; risks related to key employees, markets, economic conditions, health care reform, prices and reimbursement rates; and other risk factors detailed in our public filings with the U.S. Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Except as otherwise noted, these forward-looking statements speak only as of the date of this press release and we undertake no obligation to update or revise any of these statements to reflect events or circumstances occurring after this press release. We caution investors not to place considerable reliance on the forward-looking statements contained in this press release.
|ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS|
|Three Months Ended||Six Months Ended|
|In thousands, except per share data||June 30,||June 30,|
|Product revenue, net||$||65,326||$||27,818||$||98,960||$||51,719|
|License and other revenue||2,799||1,420||4,763||1,510|
|Cost of product revenue||1,108||488||1,594||1,183|
|Research and development||42,864||38,739||86,943||78,183|
|Selling, general and administrative||34,242||48,622||70,219||82,172|
|Transaction related cost||1,482||-||1,482||-|
|Total operating expenses||79,788||87,849||163,248||161,538|
|Other income (expense), net||(5,399||)||(4,249||)||(11,072||)||(7,012||)|
|Gain related to the Incyte transaction||128,664||-||128,664||-|
|Total other income (expense), net||123,265||(4,249||)||117,592||(7,012||)|
|Provision for income taxes||1,754||300||2,006||514|
|Net income (loss)||$||109,848||$||(63,160||)||$||56,061||$||(115,835||)|
|Net income (loss) per common share:|
|Weighted-average number of shares of common stock outstanding:|
|CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION|
|June 30,||December 31,|
|Cash, cash equivalents and marketable securities||$||278,544||$||242,295|
|CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS INFORMATION|
|Six Months Ended|
|In thousands||June 30,|
|Net cash used in operating activities||$||(97,747||)||$||(78,617||)|
|Net cash provided by (used in) investing activities||113,343||(2,700||)|
|Net cash provided by financing activities||26,607||2,461|
|Effect of exchange rates on cash||(44||)||134|
|Net increase (decrease) in cash and cash equivalents||$||42,159||$||(78,722||)|
|Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1)|
|Three Months Ended||Six Months Ended|
|In thousands, except per share data||June 30,||June 30,|
|Reconciliation of GAAP to non-GAAP Net income (loss):|
|GAAP Net income (loss)||$||109,848||$||(63,160||)||$||56,061||$||(115,835||)|
|Add: Stock-based Compensation (2)||2,658||10,644||9,378||19,078|
|Add: Restructuring Charges (3)||92||-||3,010||-|
|Add: Transaction related cost (4)||1,482||-||1,482||-|
|Non-GAAP Net income (loss)||$||114,080||$||(52,516||)||$||69,931||$||(96,757||)|
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
|Reconciliation of GAAP to non-GAAP Net income (loss) per diluted share:|
|GAAP Net income (loss)||$||0.56||$||(0.33||)||$||0.29||$||(0.62||)|
|Add: Stock-based Compensation (2)||0.02||0.05||0.05||0.11|
|Add: Restructuring Charges (3)||0.00||-||0.01||-|
|Add: Transaction related cost (4)||0.01||-||0.01||-|
|Non-GAAP Net income (loss) per diluted share||$||0.59||$||(0.28||)||$||0.36||$||(0.51||)|
(1) This presentation includes non-GAAP measures. The Company's non-GAAP measures are not meant to beconsidered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunctionwith its financial statements prepared in accordance with GAAP.(2) All stock-based compensation expenses were excluded for the non-GAAP analysis. (3) Restructuring charges associated with employee workforce reductions were excluded for the non-GAAP analysis. (4) Transaction related cost associated with the Incyte transaction were excluded for the non-GAAP analysis.