- Worldwide net product revenue from sales of Iclusig were $34.3 million for the third quarter of 2016, compared to $27.5 million in the third quarter of 2015, an increase of 25%; and $133.3 million for the first nine months of 2016, compared to $79.3 million for the first nine months of 2015, an increase of 68%. Net product revenue for the nine months ended September 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. net product revenue from sales of Iclusig were $33.6 million for the third quarter of 2016, compared to $20.3 million in the third quarter of 2015, an increase of 66 percent; and $91.2 million for the first nine months of 2016, compared to $60.6 million for the first nine months of 2015, an increase of 50 percent.
- European royalties on sales of Iclusig were $4.0 million of which $3.5 million was recorded as other revenue during the third quarter of 2016. European royalties on sales of Iclusig were $5.3 million of which $4.6 million was recorded as other revenue during the first nine months 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. European sales of Iclusig were $7.2 million for the third quarter of 2015 and $18.7 million for the first nine months of 2015.
- For the three and nine months ended September 30, 2016, license and other revenue includes $3.5 million from research and development cost sharing amounts from Incyte and achievement of a $2.0 million milestone from Medinol Ltd. earned during the third quarter of 2016.
Non-GAAP net loss for the quarter ended September 30, 2016 was $22.5 million, or $0.12 per diluted share, compared to non-GAAP net loss of $45.5 million, or $0.24 per diluted share for the quarter ended September 30, 2015. Non-GAAP net income for the nine months ended September 30, 2016 was $47.4 million, or $0.24 per diluted share, compared to non-GAAP net loss of $142.3 million, or $0.75 per diluted share, for the nine months ended September 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 $43.6 million for the third quarter of 2016, a decrease of $4.6 million or 10 percent, compared to $48.2 million for the third quarter of 2015. R&D expenses were $130.6 million for the first nine months of 2016, an increase of $4.2 million or 3 percent, compared to $126.4 million for the first nine months of 2015.
- Selling, general and administrative expenses were $26.2 million for the third quarter of 2016, a decrease of $10.5 million or 29 percent, compared to $36.7 million for the third quarter of 2015. Selling, general and administrative expenses were $96.5 million for the first nine months of 2016, a decrease of $22.4 million or 19 percent, compared to $118.9 million for the first nine months of 2015.
- For the nine months ended September 30, 2016, other income (expense), net includes a recorded gain on the Incyte transaction of $129.0 million.
- As of September 30, 2016, cash, cash equivalents and marketable securities totaled $314.7 million, compared to $278.5 million at June 30, 2016 and $242.3 million at December 31, 2015.
- In July 2016, the Company received $50.0 million from PDL BioPharma, Inc. (PDL), representing the second tranche of funding under the terms of the original royalty financing agreement. As of September 30, 2016, the amount due under the PDL royalty financing totaled $96.8 million.
- In addition, as of September 30, 2016, the Company has $200 million of aggregate principal amount of convertible notes which are due to mature on June 15, 2019.
- We are reaffirming our prior guidance for global Iclusig net product and royalty revenue of $170 million to $180 million.
- We are reaffirming our prior guidance for research and development expense of $175 million to $180 million, and sales, general and administration expense of $120 million to $125 million.
- We are reaffirming our prior guidance for cash, cash equivalents and marketable securities at December 31, 2016, of $280 million to $290 million.
- Our partner for Iclusig in Asia, Otsuka Pharmaceutical Co., Ltd. (Otsuka), received approval from the Japanese Pharmaceuticals and Medical Devices Agency (PMDA) for Iclusig for the treatment of chronic myeloid leukemia (CML) resistant or intolerant to preceding drug treatment and relapsed or treatment resistant Philadelphia chromosome-positive acute lymphoblastic leukemia (Ph+ ALL). Additional regulatory applications are pending for Taiwan and South Korea.
- ARIAD has submitted the four-year efficacy and safety data from the pivotal Phase 2 PACE clinical trial to the FDA and other health authorities as a label supplement, with an FDA action date of December 12, 2016.
- Patient enrollment is ongoing in the OPTIC and OPTIC-2L clinical trials in patients with resistant or intolerant chronic phase (CP) CML. Initial results from OPTIC are expected to be presented at the American Society of Hematology (ASH) conference in December 2017.
- Investigator-sponsored trials are ongoing in a focused set of additional clinical settings where Iclusig has potential activity, including frontline Philadelphia-positive acute lymphoblastic leukemia (Ph+ALL), acute myeloid leukemia (AML), and molecularly subtypes of solid tumors, including FGFR+ and RET+ non-small cell lung cancer.
- At ASH in December 2016, clinical trial data will be presented for both CP-CML and Ph+ ALL, in addition to new translational and real world data on Iclusig.
- ARIAD completed the New Drug Application (NDA) submission for brigatinib to the FDA for patients with ALK+ non-small cell lung cancer (NSCLC) who are resistant or intolerant to crizotinib in August 2016, and the application was accepted by the FDA in October 2016. The FDA granted ARIAD's request for Priority Review and has set an action date of April 29, 2017 under the Prescription Drug User Fee Act (PDUFA). ARIAD is also working on the European Marketing Authorization Application, which should be ready for submission early next year.
- On October 9th, updated safety and efficacy data were presented at the 41st Annual Congress of the European Society for Medical Oncology (ESMO) held in Copenhagen, Denmark, from the Phase 1/2 study of brigatinib in ALK+ NSCLC, showing greater than 12 months progression free survival in both the post-crizotinib and crizotinib naive settings, as well as continued ongoing responses in patients with CNS metastases.
- For the World Conference on Lung Cancer, to be held December 4-7 in Vienna, ARIAD and its academic collaborators will be presenting four abstracts on brigatinib. Updated results will be presented from the ALTA trial, based on a data cut later than the one underlying the ASCO presentation earlier this year. There will also be an update on CNS metastases data from the Phase 1/2 and ALTA studies.
- Patient enrollment continues for the ALTA 1L randomized, front-line clinical trial of brigatinib, a global, Phase 3 study designed to compare brigatinib and crizotinib in patients with ALK+ NSCLC who have not received prior ALK inhibitors. Full enrollment is expected in 2018.
- Investigators are moving forward with several investigator-sponsored studies, including a trial in ROS1+ NSCLC, a trial in patients who experience failure of a second-generation TKI, and a basket study to evaluate brigatinib in patients with ALK/ROS1-mutant metastatic solid tumors.
- In the United States, 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 has been established.
- We continued to advance the Phase 1/2 clinical trial of AP32788, our investigational precision therapy for patients with NSCLC having exon 20 mutations in EGFR or HER2. There are currently no approved targeted treatment options available for the approximately 6,000 U.S. patients with this disease. We continue to expect first trial data to be released in 2017.
- Finally, during the third quarter, we also continued to advance our emerging small molecule program focused on kinase targets within the space of immuno-oncology. The program remains on track with earlier guidance to enter lead optimization by the end of this year.
- Jefferies London Healthcare Conference, London, United Kingdom, November 16-17, 2016
- IASLC World Conference on Lung Cancer (WCLC), Vienna, Austria, December 4-7, 2016
- American Society of Hematology (ASH), San Diego, CA, December 4-8, 2016
- On October 20, 2016, ARIAD received a Congressional letter requesting information from the Company related to Iclusig. The Company provided a response on November 4, 2016.
Iclusig is approved in the U.S., EU, Australia, Switzerland, Israel, Canada and Japan.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 our financial and operational guidance, the anticipated timing of potential regulatory actions and research and clinical development plans and milestones for Iclusig and our product candidates, along with the statements made by our Chief Executive Officer and under the caption "Recent Progress and Key Objectives," 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 our products; 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; competition from alternative therapies; 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 and government investigations; 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||Nine Months Ended|
|In thousands, except per share data||September 30,||September 30,|
|Product revenue, net||$||34,300||$||27,543||$||133,260||$||79,262|
|License and other revenue||11,716||1,527||16,479||3,038|
|Cost of product revenue||1,131||483||2,725||1,666|
|Research and development||43,626||48,219||130,569||126,401|
|Selling, general and administrative||26,249||36,744||96,468||118,916|
|Transaction related cost||-||-||1,482||-|
|Total operating expenses||71,006||85,446||234,254||246,983|
|Loss from operations||(24,990||)||(56,376||)||(84,515||)||(164,683||)|
|Other income (expense), net||(5,171||)||(4,917||)||112,421||(11,930||)|
|(Loss) income before benefit from income taxes||(30,161||)||(61,293||)||27,906||(176,613||)|
|Benefit from income taxes||(2,334||)||(5,842||)||(328||)||(5,328||)|
|Net (loss) income||$||(27,827||)||$||(55,451||)||$||28,234||$||(171,285||)|
|Net (loss) income per common share:|
|Weighted-average number of shares of common stock outstanding:|
|CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION|
|September 30,||December 31,|
|Cash, cash equivalents and marketable securities||$||314,665||$||242,295|
|CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS INFORMATION|
|Nine Months Ended|
|In thousands||September 30,|
|Net cash used in operating activities||$||(121,436||)||$||(120,658||)|
|Net cash provided by (used in) investing activities||103,577||(4,446||)|
|Net cash provided by financing activities||92,053||54,778|
|Effect of exchange rates on cash||(44||)||(175||)|
|Net increase (decrease) in cash and cash equivalents||$||74,150||$||(70,501||)|
|Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1)|
|Three Months Ended||Nine Months Ended|
|In thousands, except per share data||September 30,||September 30,|
|Reconciliation of GAAP to non-GAAP Net (loss) income:|
|GAAP Net (loss) income||$||(27,827||)||$||(55,451||)||$||28,234||$||(171,285||)|
|Add: Stock-based Compensation (2)||5,282||9,931||14,659||29,009|
|Add: Restructuring Charges (3)||-||-||3,010||-|
|Add: Transaction related cost (4)||-||-||1,482||-|
|Non-GAAP Net (loss) income||$||(22,545||)||$||(45,520||)||$||47,385||$||(142,276||)|
|Three Months Ended||Nine Months Ended|
|September 30,||September 30,|
|Reconciliation of GAAP to non-GAAP Net (loss) income per diluted share:|
|GAAP Net (loss) income||$||(0.14||)||$||(0.29||)||$||0.14||$||(0.91||)|
|Add: Stock-based Compensation (2)||0.02||0.05||0.08||0.16|
|Add: Restructuring Charges (3)||-||-||0.01||-|
|Add: Transaction related cost (4)||-||-||0.01||-|
|Non-GAAP Net (loss) income per diluted share||$||(0.12||)||$||(0.24||)||$||0.24||$||(0.75||)|
|(1) This presentation includes non-GAAP measures. The Company's non-GAAP measures are not meant to be|
|considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction|
|with 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|
|(4) Transaction related cost associated with the Incyte transaction were excluded for the non-GAAP analysis.|