CTI BioPharma announces Q4 and FY 2015 earnings

CTI BioPharma Corp. (NASDAQ and MTA:CTIC) today reported financial results for the fourth quarter and full year ended December 31, 2015.

"While we were disappointed and surprised by the FDA's decision to place pacritinib's IND on full clinical hold, our priority and sense of purpose has always been to do what is best for patients," said James A. Bianco, M.D., president and chief executive officer of CTI BioPharma."There remains a significant unmet medical need in the treatment of myelofibrosis, especially for those with low platelet counts. We continue to see the potential of pacritinib to help this patient population and we are committed to resolving the FDA's concerns in order to identify a path forward. Additionally, we plan to define the registration path for tosedostat, which recent interim data from a cooperative group study showed the potential therapeutic utility of this oral aminopeptidase inhibitor for older patients with AML and high-risk MDS. We ended the year with a strong financial position that we believe will enable us to achieve our goals in 2016 and beyond."

Recent Highlights

Pacritinib

• In January 2016, CTI BioPharma announced the completion of the rolling New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for pacritinib, an investigational oral kinase inhibitor with specificity for JAK2, FLT3, IRAK1 and CSF1R. CTI BioPharma and Baxalta Incorporated (Baxalta) are seeking U.S. marketing approval of pacritinib for the treatment of patients with intermediate and high-risk myelofibrosis with low platelet counts of less than 50,000 per microliter (<50,000/µL). In February 2016, the FDA placed pacritinib's investigational new drug application (IND) on a full clinical hold and CTI BioPharma subsequently withdrew its NDA.
• In December 2015, researchers presented results from a new analysis of the pivotal Phase 3 trial, PERSIST-1, evaluating pacritinib versus best available therapy, excluding treatment with JAK2 inhibitors (BAT), in patients with myelofibrosis. Data examining patient outcomes across baseline demographic factors that are associated with prognosis showed that treatment with pacritinib resulted in consistent rates of spleen volume reduction and control of disease-related symptoms across all intermediate or high-risk myelofibrosis subgroups.

Tosedostat

• In December 2015, researchers presented an update on results from an investigator-sponsored Phase 2 trial of tosedostat - CTI BioPharma's investigational oral selective aminopeptidase inhibitor - in elderly patients with either primary (de novo) acute myeloid leukemia (AML) or secondary AML. The data showed a complete response (CR) rate of 48.5 percent with tosedostat in combination with low dose cytarabine/Ara-C (LDAC) - 33 percent of these patients were still responding after a median of 506 days.
• In November 2015, CTI BioPharma announced that the United Kingdom's National Cancer Research Institute (NCRI) Haematological Oncology Clinical Studies Group has chosen to advance tosedostat to the second stage of a randomized clinical trial of low-dose cytarabine plus or minus tosedostat in older patients with AML or high risk myelodysplastic syndrome (MDS). The AML Less Intensive (LI-1) trial is designed as a "Pick-a-Winner" trial to be able to simultaneously test a number of promising agents added to standard therapy with low-dose cytarabine in older patients with AML or MDS who are unfit for standard aggressive induction therapy. Nine regimens have been tested in the Pick-a-Winner program, of which only four, including tosedostat, have passed the initial hurdle for progression (which requires evidence of an improvement in remission rate with acceptable safety). CTI BioPharma plans to discuss potential approval pathways with regulators in the U.S. and EU in 2016.

Fourth Quarter and Full Year Financial Results

Total revenues for the fourth quarter and the full year ended December 31, 2015, were $11.3 million and $16.1 million, respectively, compared to $17.8 million and $60.1 million for the same periods in 2014. The decrease in total revenue for the full year ended December 31, 2015, as compared to December 31, 2014, is primarily due to recognition of milestone payments in 2014, specifically a $20.0 million development milestone payment received from Baxalta for completion of enrollment in the PERSIST-1 Phase 3 clinical trial of pacritinib and $17.3 million from an upfront payment under the PIXUVRI^® collaboration agreement with Servier. Net product revenues of PIXUVRI for the fourth quarter and the full year ended December 31, 2015, were $1.1 million and $3.5 million, respectively, compared to $2.5 million and $6.9 million for the same periods in 2014. The decrease in net product sales for the full year ended December 31, 2015, as compared to December 31, 2014, was primarily related to the pricing and volume variances between the periods as well as the decline in average exchange rate of the euro for our euro-denominated sales.

The non-GAAP operating loss, which excludes non-cash share-based compensation expense, for the fourth quarter and full year ended December 31, 2015, was $24.4 million and $101.8 million, respectively, compared to non-GAAP operating loss of $36.2 million and $66.0 million for the same periods in 2014. The GAAP operating loss for the fourth quarter and full year ended December 31, 2015, was $26.2 million and $116.7 million, respectively, compared to a GAAP operating loss of $39.4 million and $86.2 million for the same period in 2014. The increase in operating loss for the full-year ended December 31, 2015, as compared to December 31, 2014, is predominantly associated with the Phase 3 development program for pacritinib and the PIXUVRI post-authorization Phase 3 trial as well as the milestone and the upfront payments received in 2014 mentioned above. Non-cash share-based compensation expense for the fourth quarter and full year ended December 31, 2015, was $1.8 million and $14.8 million, respectively, compared to $3.2 million and $20.2 million for the same periods in 2014. For information on CTI BioPharma's use of the aforementioned non-GAAP measure and a reconciliation of such measure to GAAP operating loss, see the section below entitled "Non-GAAP Financial Measures."

Net loss for the fourth quarter of 2015 was $28.8 million, or $(0.13) per share, compared to a net loss of $44.2 million, or ($0.27) per share, for the same period in 2014. Net loss for the full year of 2015 was $122.6 million, or $(0.65) per share, compared to a net loss of $96.0 million, or $(0.65) per share, for the same period in 2014.

As of December 31, 2015, cash and cash equivalents totaled $128.2 million, compared to $70.9 million as of December 31, 2014.