Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) reported financial results for the second quarter of 2015, including revenue from sales of Iclusig® (ponatinib). The Company also provided an update on key corporate initiatives and clinical-trial plans.

“During the second quarter, the Company continued strong commercial execution of Iclusig with double-digit percentage, quarter-over-quarter growth in both the U.S. and European markets. We expect additional commercial launches and positive pricing and reimbursement decisions in several European countries during the remainder of the year,” said Harvey J. Berger, M.D., chairman and chief executive officer of ARIAD.

“With our recently announced non-dilutive synthetic-royalty financing, we are able to maximize the value of brigatinib by accelerating to early next year the start of a randomized front-line trial of brigatnib vs. crizotinib,” he continued. “This trial is one of four randomized clinical trials that we expect to begin within the next two to three quarters. In addition, we are on track to achieve full patient enrollment in the ALTA pivotal trial of brigatinib in refractory non-small cell lung cancer (NSCLC), which will form the basis for an NDA filing in third quarter of next year.”

2015 Second Quarter Financial Results

Revenues

  • Net product revenues from sales of Iclusig were $27.8 million for the quarter ended June 30, 2015, an increase of 134% vs. the second quarter of 2014 and 16% vs. the first quarter of 2015. These Iclusig product revenues are comprised of revenues of $21.6 million in the U.S. and $6.2 million inEurope. U.S. sales of Iclusig increased 16% from the first quarter to the second quarter of 2015, and European sales increased 19%.
  • Shipments of Iclusig to patients in France were $2.5 million for the second quarter of 2015. Cumulative total shipments in France, taking into account the impact of foreign exchange, totaled$20.8 million through June 30, 2015. We will record revenue related to cumulative shipments inFrance upon completion of pricing and reimbursement negotiations in France, net of any amounts that will be refunded to the French health authorities as a result of such negotiations, which we anticipate will be completed in the fourth quarter of 2015.

Net Loss

  • Net loss for the quarter ended June 30, 2015 was $63.2 million, or $0.33 per share, compared to a net loss of $56.9 million, or $0.30 per share, for the same period in 2014.
  • Research and development (R&D) expenses were $38.7 million for the second quarter of 2015, an increase of 22% compared to the second quarter of 2014. This reflects an increase in costs for our ongoing Phase 2 ALTA trial of brigatinib and NDA-enabling pharmacology and manufacturing activities, as well as an increase in personnel and other costs in support of our continuing Iclusig R&D activities.
  • Selling, general and administrative (SG&A) expenses were $48.6 million for the second quarter of 2015, an increase of 42% compared to the second quarter of 2014. This reflects an increase in personnel costs, including the impact of severance and related costs associated with the retirement of our chief executive later this year ($2.6 million for the quarter) and an increase in legal and consulting costs, including costs associated with the preparation of this year’s proxy and related initiatives ($4.9 million for the quarter).

Cash Position

  • As of June 30, 2015, cash and cash equivalents totaled $273.9 million, compared to $352.7 millionat December 31, 2014.

Financial Guidance for 2015

  • Our guidance for revenues from sales of Iclusig remains unchanged. We expect Iclusig revenues for 2015 to be in the range of $130 million to $140 million.
  • We now expect total R&D expenses for 2015 to be in the range of $177 million to $183 million, compared to our previous guidance of $185 million to $195 million. The decrease in R&D expenses is primarily attributable to a reclassification in our forecast of certain expenses from R&D to SG&A to be consistent with our financial-statement classification of such expenses.
  • Additionally, we expect total SG&A expenses for 2015 to be in the range of $166 million to $172 million, compared to our previous guidance of $135 million to $145 million for 2015. The increase in SG&A expenses is primarily attributable to the above-noted reclassification of certain expenses, as well as legal and consulting costs associated with this year’s proxy and related initiatives ($6.7 million), and severance and related costs associated with the retirement of our chief executive by year-end ($7.5 million), all of which are non-recurring expenses.
  • As a result of the revised R&D and SG&A guidance and the $50 million in funding received fromPDL BioPharma, Inc. in July 2015 pursuant to a synthetic-royalty financing, we expect our cash and cash equivalents at December 31, 2015 to be at least $240 million.

Recent Progress and Key Objectives

Commercialization of Iclusig®

  • Approximately 145 new patients were treated with Iclusig in the U.S. during the second quarter of 2015, an increase of 22% compared to the first quarter of 2015.
  • At the end of the second quarter, there were approximately 870 unique prescribers of Iclusig in the U.S., an increase in the prescriber base of approximately 16% from the first quarter of 2015.
  • In Europe, we are now promoting Iclusig in the United Kingdom, France, Germany, Italy, Austria,Switzerland, The Netherlands, Luxembourg, Denmark, Norway, and Sweden. In addition, Iclusig is available for purchase and is being supplied through named-patient programs and prior authorizations in Spain, Portugal, Finland, Ireland, Turkey, and in several markets in Eastern Europe. Prior to the end of the year, we expect additional pricing and reimbursement decisions and commercial launches in additional markets across the European region.
  • In June, we announced a commercialization agreement with Paladin Labs Inc., a Canadian specialty pharmaceutical company, to distribute Iclusig in Canada for patients with Philadelphiachromosome-positive leukemias. We expect commercial launch of Iclusig in Canada during the third quarter of this year.

Iclusig Clinical Development

  • Three randomized Iclusig clinical trials are set to begin in 2015, two of which will evaluate Iclusig in earlier lines of treatment, as follows:
    • A Phase 3 trial of Iclusig in approximately 500 patients with chronic-phase chronic myeloid leukemia (CP-CML), who have experienced treatment failure after imatinib therapy.
    • A dose-ranging trial of Iclusig in approximately 450 patients with CP-CML, who have become resistant to at least two prior TKIs.
    • An early-switch trial of Iclusig in approximately 1,000 patients with CP-CML in the United Kingdom (known as the SPIRIT3 trial).

Brigatinib Clinical Development

  • Brigatinib is currently being evaluated in the global, Phase 2 pivotal ALTA trial that we anticipate will form the basis for its initial regulatory approval. We are on track to achieve full patient enrollment of approximately 220 patients in the third quarter of 2015 and to file for approval of brigatinib in the U.S. in the third quarter of 2016.
  • We recently announced a non-dilutive synthetic-royalty financing with PDL BioPharma, Inc., which provides the Company with increased financial flexibility to accelerate clinical development of brigatinib, as well as to support brigatinib commercial readiness. A randomized front-line clinical trial of brigatinib is now set to begin in early 2016. This Phase 3 trial will compare brigatinib and crizotinib in approximately 300 patients with ALK+ NSCLC, who have not received prior ALK inhibitors.

Advancing the Pipeline

  • At the end of 2014, we nominated our next internally discovered development candidate, AP32788. This orally active TKI has a unique profile against a validated class of mutated targets in NSCLC and certain other solid tumors and may address an important unmet medical need.
  • We are on track to file an investigational new drug (IND) application for AP32788 by year-end 2015 and to begin a Phase 1/2 proof-of-concept clinical trial in 2016. (Original Source)

Shares of Ariad Pharmaceuticals closed yesterday at $8.09. ARIA has a 1-year high of $9.89 and a 1-year low of $4.90. The stock’s 50-day moving average is $8.23 and its 200-day moving average is $8.24.

On the ratings front, Ariad Pharmaceuticals has been the subject of a number of recent research reports. In a report issued on June 3, William Blair analyst Tim Lugo reiterated a Buy rating on ARIA, with a price target of $11, which implies an upside of 36.0% from current levels. Separately, on May 14, BMO’s Jim Birchenough reiterated a Buy rating on the stock and has a price target of $14.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Tim Lugo and Jim Birchenough have a total average return of -0.2% and 40.9% respectively. Lugo has a success rate of 47.2% and is ranked #2706 out of 3724 analysts, while Birchenough has a success rate of 64.7% and is ranked #14.

Overall, 2 research analysts have assigned a Hold rating and 2 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $10.50 which is 29.8% above where the stock closed yesterday.

ARIAD Pharmaceuticals Inc is an oncology company. The Company is engaged in transforming the lives of cancer patients with breakthrough medicines. It commercializes & develops products and product candidates including Iclusig, Brigatinib, and AP32788.