Ariad Pharma (ARIA) Posts Narrower than Expected Q1 Loss; Updates on Iclusig, AP26113

Ariad Pharma (NASDAQ: ARIA) reported Q1 EPS of ($0.27), $0.05 better than the analyst estimate of ($0.32). Revenue for the quarter came in at $11.8 million versus the consensus estimate of $10.41 million.

Net product revenues from sales of Iclusig were $8.0 million for the quarter ended March 31, 2014, compared to $6.4 million for the quarter ended March 31, 2013, a 25% increase. Net product revenues include Iclusig revenues of $4.7 million in the U.S. and $3.3 million in Europe. Net revenues reported do not include $3.1 million related to the following items:

• Deferred revenue of $1.3 million in the U.S., representing Iclusig inventory on hand at our specialty pharmacy as of March 31, 2014 but not yet shipped to patients as of the end of the quarter.
• Shipments of $1.8 million of Iclusig to patients in France during the first quarter ($14.7 million cumulatively through March 31, 2014), which will be recorded as revenue, when pricing and reimbursement negotiations in France are completed and the list price is determined. We anticipate that this will occur around year-end 2014. Underlying patient demand during the first quarter was consistent with 2013 levels.

License revenues for the first quarter of 2014 were $3.8 million, reflecting primarily $3.75 million in milestone payments from Medinol, Ltd. under our license agreement for the development and commercialization of drug-eluting stents incorporating our mTOR inhibitor, ridaforolimus. These milestone payments were triggered upon commencement of patient enrollment by Medinol in two clinical trials of its NIRsupreme™ Ridaforolimus-Eluting Coronary Stent System and submission of an Investigational Device Exemption to the U.S. Food and Drug Administration (FDA).

Recent Progress on Key Objectives

Commercialization of Iclusig

• Through March 31, 2014, approximately 340 patients in the U.S. received Iclusig obtained commercially based on physicians’ prescriptions. By the end of the first quarter, there were nearly 300 unique prescribers of Iclusig.
• Approximately 60 percent of prescribers are community-based physicians, with the remainder being physicians practicing in academic hospitals. We expect that adoption of Iclusig among community oncologists and hematologists will continue to increase as commercialization progresses further.
• In Europe, we are selling Iclusig in Germany, the United Kingdom, France, Austria, the Netherlands, Norway, and Sweden. This year, we expect to expand commercialization of Iclusig to all of the major markets in Europe – 16 countries – based on staged achievement of pricing and reimbursement approvals in each country. We anticipate that most of the EU pricing approvals will occur in the second half of 2014.
• The review of Iclusig under the Article 20 procedure by the Pharmacovigilance Risk Assessment Committee (PRAC) is ongoing in Europe. This procedure is aimed at obtaining a better understanding of the adverse events observed with Iclusig and proposing potential ways to further improve its benefit/risk profile. We have received the PRAC list of preliminary outstanding issues being discussed at its ongoing meeting this week. We expect to receive the final list of follow-up questions from the PRAC at the conclusion of this meeting and anticipate a recommendation by the PRAC and an opinion by the Committee for Medicinal Products for Human Use in July, two months later than originally anticipated.

Iclusig Clinical Development

• Five investigator-sponsored trials have been cleared to resume enrollment: a U.S. trial in patients with non-small cell lung cancer (NSCLC) with RET translocation, a U.S. trial in patients with medullary thyroid cancer with or without RET mutations, a U.S. trial in endometrial cancer patients with FGFR2 mutations, a French trial in patients with FLT3-positive acute myeloid leukemia (AML), and a UK trial in patients with Philadelphia chromosome-positive (Ph+) acute lymphoblastic leukemia (ALL).
• Eight additional investigator-sponsored trials are pending regulatory and/or institutional review board (IRB) approval; these include investigations in blast-phase chronic myeloid leukemia (CML), Ph+ALL, AML, and NSCLC with RET translocation and/or FGFR1 amplification.
• We will present multiple clinical updates on Iclusig at the 2014 annual meeting of the American Society of Clinical Oncology (ASCO) in June. This will include updates from the ongoing Iclusig Phase 1 and PACE trials, data from the discontinued EPIC trial in patients with newly diagnosed CML, and the Phase 2 trial in patients with refractory gastrointestinal stromal tumors (GIST).

Advancing AP26113

• A pivotal global Phase 2 trial of AP26113 in patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) who were previously treated with crizotinib is now open and enrolling patients. The ALTA trial is designed to determine the safety and efficacy of AP26113 in refractory NSCLC patients who test positive for the anaplastic lymphoma kinase (ALK+) oncogene. The trial will enroll approximately 220 patients including those with brain metastasis.
• We will present an update from the ongoing Phase 1/2 clinical trial of AP26113 at the 2014 ASCO annual meeting.

Upcoming Medical Meetings

• American Society of Clinical Oncology (ASCO) 2014 Annual Meeting, Chicago, May 30 to June 3, 2014
• European Hematology Association (EHA) 19th Congress, Milan, Italy, June 12 to 15, 2014

For earnings history and earnings-related data on Ariad Pharma (ARIA) click here.

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