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ARIAD Reports Second Quarter and First Half 2016 Financial Results

~Product revenue of $65.3 million for Q2 2016, including one-time $25.5 million from France

~U.S. product revenue of $32.6 million for Q2 2016, representing 50% growth from prior year

~Conference call scheduled today at 8:30 a.m. ET

CAMBRIDGE, Mass.--(BUSINESS WIRE)-- ARIAD Pharmaceuticals, Inc. (NASDAQ:ARIA) today reported financial results for the second quarter and first half of 2016, including revenue from sales of Iclusig® (ponatinib). The Company also provided an update on corporate developments.

"We had a strong second quarter, during which we initiated a rolling NDA submission for brigatinib based on our data from the ALTA pivotal trial, presented four-year data from the PACE clinical trial for Iclusig, and advanced AP32788 for EGFR/HER2 exon 20 non-small cell lung cancer patients into a Phase 1/2 trial," said Paris Panayiotopoulos
, president and chief executive officer of ARIAD. "We also strengthened our financial position through our agreement with Incyte and the strong sales performance of Iclusig. Our teams are focused on Iclusig growth, preparations for the potential launch of brigatinib in the U.S. and driving forward our promising pipeline."

Financial Results for the Quarter and Six Months Ended June 30, 2016

Revenue

  • 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.

GAAP and Non-GAAP Net Income (Loss)

GAAP net income for the quarter ended June 30, 2016 was $109.8 million, or $0.57 and $0.56 per basic and diluted share, respectively, compared to GAAP net loss of $63.2 million, or $0.33 loss per basic and diluted share, for the quarter ended June 30, 2015. GAAP net income for the six months ended June 30, 2016 was $56.1 million, or $0.29 per basic and diluted share, compared to GAAP net loss of $115.8 million, or $0.62 loss per basic and diluted share, for the six months ended June 30, 2015. During the 2016 periods, the Company recorded $128.7 million of gain related to the Incyte transaction under other income (expense) related to closing the sale of the Company's European operations and out-license of Iclusig rights in Europe.

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.

Other income (expense), net

  • 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.

Cash Position

  • 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.

Recent Progress and Key Objectives

Business Development

  • 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.

Iclusig

  • 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...

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