Aug 2 2011
ARIAD Pharmaceuticals, Inc. (NASDAQ: ARIA) today reported financial results for the second quarter and six months ended June 30, 2010 and provided an update on corporate developments.
“The interim data from the PACE trial that we expect to be presented at the ASH meeting will provide a valuable early read-out on the safety and tolerability of ponatinib and what is likely to be initial three-to-six month efficacy data.”
"We are making outstanding progress advancing our pipeline of internally discovered cancer-drug candidates and expect that the second half of 2011 will be filled with many drivers of shareholder value," stated Harvey J. Berger, M.D., chairman and chief executive officer of ARIAD. "Patient enrollment in the pivotal PACE trial of ponatinib is closing, and interim data will be presented later this year. Our partner, Merck, has filed for regulatory approval of ridaforolimus with the European Medicines Agency in the European Union, and we expect Merck to submit a new drug application in the U.S. shortly. AP26113 will also begin clinical development this quarter. We have outstanding momentum building throughout the Company and every expectation that it will continue throughout the remainder of this year and the coming year."
Merck Begins Submissions for Regulatory Approval of Ridaforolimus
ARIAD's partner, Merck, submitted a marketing authorization application (MAA) for ridaforolimus with the European Medicines Agency (EMA) on July 29, 2011. The submission marks the start of Merck's global submission strategy for ridaforolimus that includes Europe, the U.S., Canada, Asia-Pacific and Latin America and other key markets around the world.
ARIAD expects Merck to submit a new drug application in the U.S. shortly. If approved, ARIAD believes that oral ridaforolimus, an investigational mTOR inhibitor, would be the first molecularly targeted drug for the treatment of patients with metastatic sarcomas and the first sarcoma drug to be approved for use in the maintenance setting.
Following completion of the administrative validation process for the MAA by the EMA, which is targeted for mid-August, the application will have been accepted, and the scientific review will begin. Acceptance of the MAA will trigger a $25 million milestone payment by Merck to ARIAD. Approval of ridaforolimus in the U.S. will secure a $25 million milestone payment by Merck to ARIAD, and approval to sell ridaforolimus, including pricing approval, in the European Union will secure a $10 million milestone payment.
Comprehensive data from the 711-patient Phase 3 SUCCEED trial of oral ridaforolimus in patients with metastatic soft-tissue and bone sarcomas were presented in an oral session at the American Society of Clinical Oncology meeting this past June. The study achieved its primary endpoint of a significant improvement in progression-free survival compared to placebo, with an approximately thirty-percent reduction in the risk of progression due to ridaforolimus. The data also showed a positive trend favoring ridaforolimus in an interim analysis of the secondary endpoint of overall survival.
ARIAD is also working closely with Merck in planning its co-promotion of ridaforolimus in the U.S. Co-promotion provides ARIAD with a direct involvement in the potential commercial success of ridaforolimus and, at the same time, lays the groundwork for the infrastructure that will be utilized by ARIAD for the potential future commercialization of ponatinib upon approval.
Interim Data from the PACE Trial Expected at End of Year
Patient enrollment is nearly complete in the pivotal Phase 2 PACE trial of ponatinib, ARIAD's investigational pan-BCR-ABL inhibitor, with five of six patient cohorts now closed to enrollment and the sixth expected to close this quarter. The global PACE trial is being conducted in patients with chronic myeloid leukemia (CML) and Philadelphia-chromosome positive acute lymphoblastic leukemia (Ph+ ALL) who are resistant or intolerant to either of the second-generation CML therapies, or those who have the T315I mutation of BCR-ABL for which no current treatments are known to be effective.
The PACE trial is achieving full patient enrollment nearly six months ahead of schedule. Due to both patient and physician interest in ponatinib, ARIAD over-enrolled the study and now expects close to 450 patients to be included in this pivotal, registration trial. ARIAD expects to file for regulatory approval of ponatinib in the middle of next year, providing the potential for U.S. marketing authorization by the end of 2012 based on priority review by the Food and Drug Administration, if granted.
Importantly, as a result of the speed at which patients have been enrolled in the PACE trial and the earlier availability of follow-up data on patient outcomes, ARIAD is submitting interim data from the trial this summer - a year ahead of schedule - for presentation at the annual meeting of the American Society of Hematology in December. These data will include a broad assessment on the tolerability and safety profile of ponatinib in nearly all patients enrolled in the PACE trial and an early analysis of efficacy in those patients with sufficient follow up to evaluate the primary end-points.
In addition, updated data from the ongoing Phase 1 clinical trial of ponatinib in patients with resistant and refractory CML will be presented at the International Chronic Myeloid Leukemia Foundation Conference in September. The presentation will include data on the maturity of response rates to ponatinib, long-term durability of response, and time course of response. This presentation is expected to be the last one on the Phase 1 trial prior to submission of the study for publication in a peer-reviewed medical journal.
"The presentation on the updated Phase 1 data of ponatinib will be an important next step in understanding how the response rates have matured, the time course of these responses, and the long-term durability of response," stated Frank G. Haluska, M.D., Ph.D., vice president of clinical research and development and chief medical officer. "The interim data from the PACE trial that we expect to be presented at the ASH meeting will provide a valuable early read-out on the safety and tolerability of ponatinib and what is likely to be initial three-to-six month efficacy data."
AP26113 Moves Into the Clinic This Quarter
ARIAD is advancing its third internally discovered small-molecule oncology-drug candidate into clinical development this quarter. The company presented preclinical data on AP26113, its investigational dual-inhibitor of both ALK and EGFR, two separate and clinically validated targets in patients with non-small cell lung cancer, in the second quarter. The investigational new drug application for AP26113 in the U.S. now is active, and ARIAD will begin a Phase 1/2 clinical trial of AP26113 this quarter.
ARIAD scientists designed AP26113 as a highly potent dual inhibitor of ALK and EGFR with best-in-class potential. As an ALK inhibitor, in preclinical studies, AP26113 has been shown to be substantially more potent than crizotinib, Pfizer's investigational ALK inhibitor, and to overcome crizotinib-resitant mutations that are now being seen in patients who received crizotinib. As an EGFR inhibitor, AP26113 inhibits the oncogenic form of EGFR in preclinical studies including the major mutation that causes resistance to erlotinib, Roche/Astellas' marketed EGFR inhibitor.
"AP26113 can be thought of as potentially two drugs in one," stated Tim P. Clackson, Ph.D., president of research and development and chief scientific officer at ARIAD. "Our goal is to develop '113 in the same way we developed ponatinib - by quickly determining its safety and tolerability profile, identifying the optimal dose, and establishing clinical proof-of-concept in a single trial, and then moving rapidly toward a pivotal trial depending on the available data. There is enormous unmet medical need in patients with non-small cell lung cancer, and the addressable patient population for '113 is well into the tens of thousands worldwide."
Financial Highlights from the Second Quarter of 2011
For the quarter ended June 30, 2011, ARIAD reported a net loss of $47.8 million, or $0.36 per share, compared to net income of $159.3 million, or $1.44 per share, for the corresponding period in 2010. For the six-month period ended June 30, 2011, ARIAD reported a net loss of $85.7 million or $0.66 per share, compared to net income of $136.0 million or $1.24 per share. The change in net income/loss for these periods was due primarily to the restructuring in May 2010 of the Company's agreement with Merck for the development, commercialization and manufacturing of ridaforolimus and non-cash charges in 2011 related to the revaluation of ARIAD's warrant liability as a result of the increase in the market price of ARIAD's common stock.
The restructuring in May 2010 of the agreement with Merck resulted in the recognition in the second quarter of 2010 of $172.3 million in revenue, including an up-front payment of $50 million and the acceleration of recognition of $109.4 million of revenue previously deferred in accordance with the Company's accounting policies. ARIAD's revenue for the three and six-month periods ended June 30, 2011 of $66,000 and $122,000, respectively, represent a decrease of $175.0 million and $177.1 million from revenues recorded in the comparable periods in 2010, primarily due to the impact of the Merck restructuring.
ARIAD reported operating expenses of $24.9 million for the three-month period ended June 30, 2011, an increase of $7.1 million over the comparable period in 2010, and operating expenses of $44.3 million for the six-month period ended June 30, 2011, also an increase of $7.1 million over the comparable period in 2010. These increases reflect primarily the continued advancement of ARIAD's product candidates, ponatinib and AP26113, expenditures for corporate and commercial development initiatives, and increases in stock-based compensation due to the impact of the increased stock price on the value of stock-based compensation awards.
Non-cash charges related to the revaluation of ARIAD's warrant liability were $22.9 million and $41.5 million for the three and six-month periods, respectively, ended June 30, 2011. These charges compare to a non-cash credit of $2.1 million in the three-month period ended June 30, 2010 and a non-cash charge of $3.9 million for the six-month period ended June 30, 2010. These charges in 2011 are primarily attributable to an increase in the market price of ARIAD's common stock from $2.82 per share at June 30, 2010 to $5.10 per share at December 31, 2010 and $11.33 per share at June 30, 2011.
For the six-month period ended June 30, 2011, cash used in operations was $35.4 million, compared to cash provided by operations of $20.2 million for the corresponding period in 2010, which included the $50 million up-front payment from Merck related to the restructured agreement. In addition, cash flows for the six months ended June 30, 2011 included $7.6 million in proceeds from the exercise of warrants and $4.4 million in proceeds resulting from an amendment to ARIAD's term-loan agreement. ARIAD ended the second quarter of 2011 with cash and cash equivalents of $80.8 million, compared to $103.6 million at December 31, 2010.
Upcoming Medical Meeting
- 13th International Chronic Myeloid Leukemia Foundation Conference, Estoril, Portugal, September 22 to 25, 2011
Upcoming Investor Meetings
- Rodman & Renshaw Annual Global Investment Conference, New York, NY, September 11 to 13, 2011
- Morgan Stanley Global Healthcare Conference, New York, NY, September 13 to 14, 2011
- Jefferies 2011 Global Healthcare Conference, London, England, September 27 to 28, 2011
- NewsMakers in the Biotech Industry Conference, New York, NY, October 21, 2011
Source ARIAD
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