TESARO, Inc. (NASDAQ:TSRO), an oncology-focused biopharmaceutical
company, today reported operating results for third-quarter 2018
and provided an update on the Company's commercial products and
development programs.
“In the third quarter, we launched several
initiatives to grow the use of ZEJULA for recurrent ovarian cancer
and we continued to execute on our development strategies focused
on gynecologic and lung cancers as we approach a period of
significant data readouts,” said Lonnie Moulder, CEO of TESARO.
“Following results of the Phase 3 PRIMA trial next year, we intend
for ZEJULA to benefit patients throughout all stages of their
ovarian cancer journey, including first-line, recurrent, and
late-line treatment settings. Our immuno-oncology pipeline
continues to advance, led by our anti-PD-1 antibody, TSR-042, for
which we are on track to submit a BLA next year. We look forward to
initial data from the Phase 1 AMBER trial of our anti-TIM-3
antibody, TSR-022, in combination with TSR-042, which will be
presented at the Society for Immunotherapy of Cancer (SITC) Annual
Meeting next week.”
Recent Business Highlights
- ZEJULA net revenue increased 61%
year-over-year to $63.2 million for the third quarter of 2018. In
the U.S. and Europe, approximately 10,000 patients have been
treated with ZEJULA since its launch in April 2017. ZEJULA is now
approved in 33 countries and is reimbursed and launched in Germany,
the U.K., Italy and several other European countries.
- Safety data were presented from the
Phase 3 PRIMA trial of ZEJULA monotherapy in first-line ovarian
cancer during the European Society for Medical Oncology (ESMO)
Annual Congress in October. Data demonstrated a favorable
tolerability profile for niraparib when dosed according to a
patient’s weight and platelet count compared to a fixed starting
dose. The PRIMA Phase 3 trial is fully enrolled and top-line
results are expected in late 2019.
- Based upon the responses observed
in the first stage of the study, the second stage of the Phase 2
JASPER study was initiated, which evaluates ZEJULA in combination
with TSR-042 as a first-line treatment for patients with non-small
cell lung cancer and high levels of PD-L1 expression.
- Data were presented from the GARNET
trial of TSR-042 monotherapy at ESMO and demonstrated TSR-042 is
well tolerated and has robust clinical activity in patients with
MSI-H endometrial cancer.
- Zai Lab Limited announced ZEJULA
approval in Hong Kong on October 22, 2018. ZEJULA is the first and
only PARP inhibitor approved in Hong Kong for the maintenance
treatment of platinum-sensitive relapsed ovarian cancer regardless
of BRCA mutation status.
- In October, TESARO and actress
Cobie Smulders launched Not on My Watch, a national movement to
empower the ovarian cancer community, especially women with
recurrent ovarian cancer, to take informed and proactive steps
against the threat of disease recurrence.
- Development milestones were
achieved in October related to Janssen’s ongoing GALAHAD trial of
niraparib monotherapy for the treatment of men with metastatic
castration-resistant prostate cancer (mCRPC) and DNA-repair
anomalies. The achievement of these milestones triggered an $18
million payment from Janssen to TESARO.
Third Quarter 2018 Financial
Results
TESARO reported net product revenue of $63.6
million for the third quarter of 2018, compared to a total of $41.8
million for the third quarter of 2017. ZEJULA net revenue increased
61% to $63.2 million for the third quarter of 2018, compared to
$39.4 million for the third quarter of 2017. Cost of goods sold
increased to $14.2 million for the third quarter of 2018, compared
to $6.2 million for the same period in 2017, primarily related to
increased volume and new supplier set-up expenses.
Research and development expenses increased to
$94.2 million for the third quarter of 2018, compared to $73.4
million for the third quarter of 2017, driven primarily by higher
manufacturing and clinical development costs associated with
TSR-042, TSR-022, and ZEJULA, and research collaborations.
Selling, general and administrative expenses
increased to $93.5 million for the third quarter of 2018, compared
to $84.0 million for the third quarter of 2017, primarily due to
increased headcount and activities in support of the launches of
ZEJULA in the U.S. and Europe.
Operating expenses as described above include
total non-cash, stock-based compensation expense of $24.8 million
for the third quarter of 2018, compared to $25.0 million for the
third quarter of 2017.
Net loss totaled $137.1 million, or ($2.49) per
share, for the third quarter of 2018, compared to a net loss of
$25.3 million, or ($0.47) per share, for the third quarter of 2017.
The increase in net loss was primarily due to the $100.0 million
up-front payment received and recorded as revenue in the third
quarter of 2017 as part of the license agreement with Takeda,
partially offset by a $17.6 million gain in the third quarter of
2018 associated with the divestiture of VARUBI in the U.S., for
which TESARO received an up-front payment of $35 million.
(in thousands,
except per share amounts) |
Three Months Ended September 30, |
|
2018 |
2017 |
|
|
|
Product revenue,
net |
|
|
ZEJULA® |
$ |
63,226 |
|
$ |
39,375 |
|
VARUBI®/VARUBY® |
$ |
386 |
|
$ |
2,380 |
|
Total product revenue,
net |
$ |
63,612 |
|
$ |
41,755 |
|
License, collaboration,
and other revenue |
$ |
787 |
|
$ |
101,011 |
|
Total revenues |
$ |
64,399 |
|
$ |
142,766 |
|
|
|
|
Net loss |
$ |
(137,088 |
) |
$ |
(25,277 |
) |
|
|
|
Net loss per share,
basic and diluted |
$ |
(2.49 |
) |
$ |
(0.47 |
) |
(in
thousands) |
Three Months Ended September 30, |
|
2018 |
2017 |
Cost of sales -
product |
$ |
14,225 |
|
$ |
6,216 |
|
Cost of sales -
intangible asset amortization |
$ |
728 |
|
$ |
1,254 |
|
Research and
development (R&D) |
$ |
94,188 |
|
$ |
73,388 |
|
Selling, general and
administrative (SG&A) |
$ |
93,497 |
|
$ |
83,998 |
|
Acquired in-process
R&D |
$ |
- |
|
$ |
- |
|
Cash and Cash Equivalents
As of September 30, 2018, TESARO had
approximately $476.8 million in cash and cash equivalents and
approximately 55.0 million outstanding shares of common stock.
2018 Financial Guidance
TESARO is updating its 2018 financial guidance
for ZEJULA:
Total Revenue,
net, worldwide (FY) |
$258 to $265
million (previously $250 to $265 million) |
ZEJULA (FY) |
$233 to $238 million(previously $225 to $235 million) |
ZEJULA (Q4) |
$67 to $72 million |
Other revenue, including licensing and VARUBY oral (FY) |
$25 to $27 million(previously $25 to $30 million) |
Interest expense (FY) |
Approximately $60 million, including non-cash interest expense of
$14 million |
In the third quarter, TESARO’s cash and cash
equivalents balance declined by approximately $98 million. TESARO
anticipates year-end 2018 cash and cash equivalents to be
approximately $400 million.
Key Development Milestones
Gynecologic Cancers:
- Submit QUADRA sNDA for treatment of late-line ovarian cancer
beyond BRCAmut near year-end
- Results of the AVANOVA Phase 2 study of ZEJULA in combination
with bevacizumab for treatment of recurrent ovarian cancer to be
submitted for presentation at a medical meeting in 1H 2019
- Report Phase 2 OVARIO results of ZEJULA in combination with
bevacizumab in first-line ovarian cancer maintenance in late
2019
- Report Phase 3 PRIMA results of ZEJULA in first-line ovarian
cancer maintenance in late 2019
Lung Cancer:
- Report initial data for the AMBER trial of TSR-022 in
combination with TSR-042 at the Society for Immunotherapy of
Cancer’s (SITC) Annual Meeting on November 9
- Report additional data from the NSCLC cohort of the GARNET
trial of TSR-042 at SITC
- Initiate Phase 2 registration enabling trial of TSR-042 versus
standard of care in first-line NSCLC in early 2019
- Report additional data from the Phase 2 JASPER study of ZEJULA
in combination with anti-PD-1 at a medical meeting in 1H 2019
Breast Cancer:
- Submit BRAVO data for ZEJULA in germline BRCAmut breast cancer
patients for publication in Q4 2018
- Complete protocol development for registration study of ZEJULA
in combination with TSR-042 and other agents in breast cancer
Prostate Cancer:
- Janssen to advance GALAHAD trial of ZEJULA in mCRPC and
DNA-repair anomalies to support global regulatory filings in
2019
- Planning underway by Janssen for a future Phase 3 trial that
will assess the clinical benefit of niraparib in combination with
abiraterone acetate + prednisone in mCRPC patients
Immuno-oncology Pipeline:
- Continue dose-escalation in the CITRINO trial (combination of
TSR-033 plus TSR-042) and report Phase 1 monotherapy
dose-escalation data for TSR-033 at SITC
- Advance IND-enabling studies of PD-1/LAG-3 bi-specific antibody
(TSR-075)
Today's Conference Call and
Webcast
TESARO will host a conference call to discuss
the Company's third quarter operating results and provide an update
on the Company's commercial products and development programs today
at 4:15 P.M. Eastern time. The accompanying slide presentation and
live webcast of the conference call can be accessed by visiting the
TESARO website at www.tesarobio.com. The call can be accessed by
dialing (877) 853-5334 (U.S. and Canada) or (970) 315-0307
(international). A replay of the webcast will be archived on the
Company's website for 30 days following the call.
About ZEJULA (niraparib)
ZEJULA (niraparib) is a poly (ADP-ribose)
polymerase (PARP) inhibitor indicated for the maintenance treatment
of adult patients with recurrent epithelial ovarian, fallopian
tube, or primary peritoneal cancer who are in a complete or partial
response to platinum-based chemotherapy. In preclinical
studies, ZEJULA concentrates in the tumor relative to plasma,
delivering greater than 90% durable inhibition of PARP 1/2 and a
persistent antitumor effect. Myelodysplastic Syndrome/Acute Myeloid
Leukemia (MDS/AML), including some fatal cases, was reported in
patients treated with ZEJULA. Discontinue ZEJULA if MDS/AML is
confirmed. Hematologic adverse reactions (thrombocytopenia,
anemia and neutropenia), as well as cardiovascular effects
(hypertension and hypertensive crisis) have been reported in
patients treated with ZEJULA. Monitor complete blood counts to
detect hematologic adverse reactions, as well as to detect
cardiovascular disorders, during treatment. ZEJULA can cause
fetal harm and females of reproductive potential should use
effective contraception. Please see full prescribing information,
including additional important safety information, available at
www.zejula.com.
About TESARO
TESARO is an oncology-focused biopharmaceutical
company devoted to providing transformative therapies to people
bravely facing cancer. For more information, visit
www.tesarobio.com, and follow us on Twitter and LinkedIn.
Investor/Media Contact:Kate
RauschDirector, Investor
Relations1.781.257.2505krausch@tesarobio.com
Forward Looking Statements
To the extent that statements contained in this
press release are not descriptions of historical facts regarding
TESARO, they are forward-looking statements reflecting the current
beliefs and expectations of management made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. Words such as "may," "will," "expect," "anticipate,"
"estimate," "intend," and similar expressions (as well as other
words or expressions referencing future events, conditions, or
circumstances) are intended to identify forward-looking statements.
Examples of forward-looking statements contained in this press
release include, among others, statements regarding: our 2018
revenue, interest expense, and cash balance guidance; the design
and expected timing of initiation, enrollment, and data readouts
and publications from our various ongoing and planned ZEJULA,
TSR-042, TSR-033, TSR-022, combination, and other clinical trials;
the expected timing of our various BLA, sNDA and other regulatory
filings; and our expectation to achieve our various development
milestones. Forward-looking statements in this release involve
substantial risks and uncertainties that could cause our research
and development programs, future financial and other results,
performance, or achievements to differ significantly from those
expressed or implied by the forward-looking statements. Such risks
and uncertainties include, among others, risks related to the
acceptance of our products in the marketplace, competition, the
uncertainties inherent in the execution and completion of clinical
trials, uncertainties surrounding the timing of availability of
data from clinical trials, uncertainties surrounding potential
actions by regulatory authorities, uncertainties regarding the
expected timing and magnitude of certain expenditures, risks
related to manufacturing and supply, risks related to intellectual
property, the terms of our term loan facility, other matters that
could affect our financial results, the results of our ongoing and
planned development programs, and/or the availability or commercial
potential of our products and drug candidates. TESARO undertakes no
obligation to update or revise any forward-looking statements. For
a further description of the risks and uncertainties that could
cause actual results to differ from those expressed in these
forward-looking statements, as well as risks relating to the
business of the Company in general, see TESARO's Annual Report on
Form 10-K for the year ended December 31, 2017 and Quarterly Report
on Form 10-Q for the quarter ended June 30, 2018.
TESARO,
Inc. |
Unaudited Condensed Consolidated Statements of
Operations |
(in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30, |
|
Nine Months Ended
September 30, |
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
Product
revenue, net: |
|
|
|
|
|
|
|
|
|
|
|
ZEJULA® |
|
$ |
63,226 |
|
|
$ |
39,375 |
|
|
$ |
165,989 |
|
|
$ |
65,321 |
|
|
|
|
VARUBI®/VARUBY® |
|
|
386 |
|
|
|
2,380 |
|
|
|
4,323 |
|
|
|
7,402 |
|
|
|
Total
product revenue, net |
|
|
63,612 |
|
|
|
41,755 |
|
|
|
170,312 |
|
|
|
72,723 |
|
|
|
License,
collaboration and other revenues |
|
|
787 |
|
|
|
101,011 |
|
|
|
1,037 |
|
|
|
102,580 |
|
|
Total
revenues |
|
|
64,399 |
|
|
|
142,766 |
|
|
|
171,349 |
|
|
|
175,303 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of sales - product |
|
|
14,225 |
|
|
|
6,216 |
|
|
|
37,735 |
|
|
|
10,280 |
|
|
|
Cost of sales - intangible asset amortization |
|
|
728 |
|
|
|
1,254 |
|
|
|
3,663 |
|
|
|
4,723 |
|
|
|
Research and development (1) |
|
|
94,188 |
|
|
|
73,388 |
|
|
|
288,551 |
|
|
|
210,910 |
|
|
|
Selling, general and administrative (1) |
|
|
93,497 |
|
|
|
83,998 |
|
|
|
287,137 |
|
|
|
246,239 |
|
|
|
Acquired in-process research and development |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
7,000 |
|
|
Total
expenses |
|
|
202,638 |
|
|
|
164,856 |
|
|
|
617,086 |
|
|
|
479,152 |
|
|
Loss from
operations |
|
|
(138,239 |
) |
|
|
(22,090 |
) |
|
|
(445,737 |
) |
|
|
(303,849 |
) |
|
Gain on
sale of business |
|
|
17,627 |
|
|
|
- |
|
|
|
17,627 |
|
|
|
- |
|
|
Interest
and other income (expense), net |
|
|
(16,154 |
) |
|
|
(3,048 |
) |
|
|
(37,715 |
) |
|
|
(9,941 |
) |
|
Loss before
income taxes |
|
|
(136,766 |
) |
|
|
(25,138 |
) |
|
|
(465,825 |
) |
|
|
(313,790 |
) |
|
Provision
for income taxes |
|
|
322 |
|
|
|
139 |
|
|
|
730 |
|
|
|
271 |
|
|
Net
loss |
|
$ |
(137,088 |
) |
|
$ |
(25,277 |
) |
|
$ |
(466,555 |
) |
|
$ |
(314,061 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
per share applicable to |
|
|
|
|
|
|
|
|
|
|
common stockholders - basic and diluted |
|
$ |
(2.49 |
) |
|
$ |
(0.47 |
) |
|
$ |
(8.51 |
) |
|
$ |
(5.82 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common |
|
|
|
|
|
|
|
|
|
|
shares used in net loss per share
applicable to common stockholders - basic and diluted |
|
|
54,957 |
|
|
|
54,241 |
|
|
|
54,807 |
|
|
|
53,971 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Expenses include the following amounts of non-cash stock-based
compensation expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
$ |
7,128 |
|
|
$ |
8,545 |
|
|
$ |
23,137 |
|
|
$ |
23,532 |
|
|
|
Selling, general and administrative |
|
|
17,630 |
|
|
|
16,471 |
|
|
|
56,158 |
|
|
|
43,393 |
|
|
TESARO, Inc. |
Unaudited Condensed Consolidated Balance
Sheets |
(in thousands) |
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
2018 |
|
2017 |
Assets |
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
476,812 |
|
|
$ |
643,095 |
|
Accounts
receivable |
|
|
31,362 |
|
|
|
53,416 |
|
Inventories |
|
|
108,822 |
|
|
|
57,939 |
|
Other current
assets |
|
|
31,382 |
|
|
|
33,511 |
Total
current assets |
|
|
648,378 |
|
|
|
787,961 |
|
|
|
|
|
|
Intangible
assets, net |
|
|
35,897 |
|
|
|
56,384 |
Property
and equipment, net |
|
|
9,923 |
|
|
|
9,652 |
Restricted
cash |
|
|
8,610 |
|
|
|
2,552 |
Other
assets |
|
|
8,032 |
|
|
|
5,636 |
|
Total assets |
|
$ |
710,840 |
|
|
$ |
862,185 |
|
|
|
|
|
|
Liabilities and stockholders' equity
(deficit) |
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
28,160 |
|
|
$ |
4,172 |
|
Accrued expenses |
|
|
150,933 |
|
|
|
154,808 |
|
Deferred revenue,
current |
|
|
530 |
|
|
|
324 |
|
Other current
liabilities |
|
|
10,819 |
|
|
|
6,902 |
Total
current liabilities |
|
|
190,442 |
|
|
|
166,206 |
|
|
|
|
|
|
Convertible
notes, net |
|
|
153,057 |
|
|
|
143,446 |
Long-term
debt, net |
|
|
490,525 |
|
|
|
293,659 |
Deferred
revenue, non-current |
|
|
141 |
|
|
|
211 |
Other
non-current liabilities |
|
|
7,467 |
|
|
|
9,577 |
|
Total liabilities |
|
|
841,632 |
|
|
|
613,099 |
|
|
|
|
|
|
Total
stockholders' equity (deficit) |
|
|
(130,792 |
) |
|
|
249,086 |
|
Total liabilities and
stockholders' equity (deficit) |
|
$ |
710,840 |
|
|
$ |
862,185 |
|
|
|
|
|
|
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