His Immune System Went Out of Whack. The Usual Treatment Didnt Work. Why? – The New York Times

Jagasia was concerned that although G.V.H.D. was the most likely diagnosis, it might not be the right one. The patient had already been tested for the usual infections seen in immune-suppressed patients. So he looked for other possible causes of the patients diarrhea. He didnt find any. The patient lost another 15 pounds. When he looked in the mirror, he hardly recognized himself. Jagasia arranged for the patient to start getting intravenous nutrition and began tapering one immune-suppressing medication in order to start another.

The patients son was in medical school in another part of the state and called home frequently. When his father finally told him how sick he was, his son got scared. His father was a minimizer. If he was saying this, things must be bad.

When he got off the phone, the young man immediately turned to the internet. He typed in gastroenteritis after ... stem-cell transplant. The first results that came up referred to a paper in a medical journal, Clinical Infectious Diseases, published nearly a decade earlier that identified an unexpected culprit: norovirus.

Norovirus is one of the most common causes of gastroenteritis in the world. In the United States, its linked to an estimated 21 million cases of nausea and vomiting every year. Diarrhea can be present but is not typically as severe as other symptoms. In a normal host, the infection resolves on its own after 48 to 72 hours, thanks to the hard work of the immune system. Even so, norovirus was not a common cause of diarrhea in those who are immunosuppressed. But in the medical-journal paper, the first of its kind, 12 patients who had a stem-cell transplant and developed a persistent diarrheal illness were found to have norovirus. And of those 12, 11 were initially thought to have G.V.H.D. In most of those cases, it was only after the immune-suppressing medications were reduced that the patients own defenses could come to the rescue and vanquish the virus.

The son immediately sent the paper to his father. Had he been tested for norovirus? he asked. The patient wasnt sure. He forwarded the journal article to Jagasia and asked if hed had this test. He hadnt. Jagasia was 99 percent certain that this was a wild-goose chase. Hed never seen norovirus in patients with compromised immune systems. Still, testing was easy.

When the test came back positive, Jagasia was stunned. He repeated the test. Positive again. He immediately started to taper the immune-suppressing medications. As the doses came down, the diarrhea slowed, and after a few weeks, it stopped completely. With the help of the IV nutrition, and a slowly improving appetite, the patient began to gain back the weight he lost. From the patients point of view, his son saved his life.

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His Immune System Went Out of Whack. The Usual Treatment Didnt Work. Why? - The New York Times

China reports new progress in drug, therapies against Covid-19 – The Star Online

BEIJING: China has completed the clinical research of Favipiravir, an antiviral drug that has shown good clinical efficacy against the Covid-19 (coronavirus) outbreak, according to an official on Tuesday (March 17).

Favipiravir, the influenza drug which was approved for clinical use in Japan in 2014, has shown no obvious adverse reactions in the clinical trial, said Zhang Xinmin, director of the China National Center for Biotechnology Development under the Ministry of Science and Technology, at a press conference.

More than 80 patients have participated in the clinical trial in The Third People's Hospital of Shenzhen, south China's Guangdong Province, including 35 patients taking Favipiravir and 45 patients on a control group.

Results showed that patients receiving Favipiravir treatment turned negative for the virus in a shorter time compared with patients in the control group.

A multi-centred randomised clinical study led by the Zhongnan Hospital of Wuhan University also suggested that the therapeutic effect of Favipiravir is much better than that of the control group.

Favipiravir has been recommended to medical treatment teams and should be included in the diagnosis and treatment plan for Covid-19 as soon as possible, Zhang said.

A Chinese pharmaceutical company has been approved by the National Medical Products Administration to mass-produce the drug and ensure stable supply, Zhang added.

China is also pushing forward the utilization of some advanced technologies such as stem cell and artificial liver and blood purification in the treatment of severe cases.

Zhang said stem cell therapy proves effective in reducing severe inflammatory reactions caused by Covid-19, as well as reducing lung injury and pulmonary fibrosis in patients.

China has initiated several clinical research programs on stem cell therapy against Covid-19, including a stem cell drug that has been approved for clinical trial and a mesenchymal stem cell therapy.

Stem cell therapy has been used to treat 64 patients in severe and critical condition. Those patients' breathing difficulties were gradually relieved and they were generally cured in eight to 10 days.

The therapy also showed advantages in preventing pulmonary fibrosis and improving the long-term prognosis for patients.

The Chinese Society for Cell Biology and the Chinese Medical Association have jointly issued a guideline to standardize the clinical research and application of stem cell therapy against Covid-19.

Zhang said China is trying to use artificial liver and blood purification technology to treat critically ill patients. Patients receiving this treatment have seen reduced levels of inflammatory factors and improvement in chest imaging.

Their time on ventilator support has been decreased by an average of 7.7 days and the required ICU monitoring time has been shortened. - Xinhua/Asian News Network

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China reports new progress in drug, therapies against Covid-19 - The Star Online

Imfinzi in Combination with Standard-of-Care Chemotherapies Improves Survival in Lung Cancer – Curetoday.com

Final results of the phase 3 CASPIAN trial show that Imfinzi (durvalumab) in combination with a choice of standard-of-care chemotherapies demonstrates a sustained overall survival benefit in patients with extensive-stage small cell lung cancer.

We are pleased to see the sustained and meaningful survival benefit of Imfinzi for patients with small cell lung cancer after more than two years median follow up, Jose Baselga, executive vice president of oncology research and development at AstraZeneca, said in a company-issued press release. We have already received the first global regulatory approval for Imfinzi with etoposide plus either carboplatin or cisplatin and remain on track for more approvals soon as we provide patients an important new first-line treatment option.

Imfinzi a human monoclonal antibody that binds to PD-L1 and blocks the interaction of PD-L1 with PD-1 and CD80 counters the tumor's immune-evading tactics and releases the inhibition of immune responses.

Previous results of the trial showed that Imfinzi plus etoposide and either carboplatin or cisplatin chemotherapy improved overall survival defined by the start of treatment until the time of patient death versus standard-of-care chemotherapy alone.

Safety and tolerability data for Imfinzi were similar to previous safety results and will be presented at a future medical conference.

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Imfinzi in Combination with Standard-of-Care Chemotherapies Improves Survival in Lung Cancer - Curetoday.com

What Are Drug Prevention and Treatment Options for COVID-19? – Pharmacy Times

COVID-19 has changed life as we know it.

There is no preventive vaccine or specific treatment available, according to the CDC.

Control measures and infection prevention should be implemented, and patients should receive supportive care, as needed.

Patients who have mild symptoms and seek advice should be advised to drink fluids, self-quarantine for 14 days, and take OTC medication for fever or other symptoms. They should also contact their doctor for further advice and guidance to see if a coronavirus test is available and/or needed.

Those with difficulty breathing or shortness of breath and high fevers should be seen and may be admitted into the hospital for oxygen. Some patients even need a ventilator. They should, if possible, first call their local emergency department for instruction.

All patients should focus on prevention and social distancing. These tips from the CDC are helpful.

Several pharmaceutical companies are racing to develop an effective treatment for the virus that is now a global pandemic. There are several classes of drugs in development, including antivirals, immunotherapies, vaccinations, as well as other investigational options. It is unknown whether a single drug could work or if a combination is needed, similar to HIV treatment. Below is a table outlining each area.

Note: corticosteroids should generally be avoided, because of their potential to prolong viral replication. In some cases, steroids may be indicated for other reasons.

Vaccines

Suzanne Soliman, PharmD, BCMAS, is the founder and president of the Pharmacist Moms Group.

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What Are Drug Prevention and Treatment Options for COVID-19? - Pharmacy Times

Orchard Therapeutics Appoints Company Founder and Gene Therapy Pioneer Bobby Gaspar, MD, Ph.D., as New Chief Executive Officer – BioSpace

BOSTON and LONDON, March 18, 2020 (GLOBE NEWSWIRE) -- Orchard Therapeutics (Nasdaq: ORTX), a global gene therapy leader, today announced that company founder and gene therapy pioneer Bobby Gaspar, M.D., Ph.D., has been named chief executive officer, effective immediately. Dr. Gaspar, previously president of research, chief scientific officer, and a member of the Orchard board of directors, succeeds Mark Rothera, who has served as the companys chief executive officer since 2017. As part of this transition process, Frank Thomas, Orchards chief operating officer and chief financial officer, will take on the role of president.

As a world-renowned scientist and physician, and accomplished strategic and organizational leader with more than 25 years of experience in medicine and biotechnology, Bobby Gaspar is uniquely qualified to lead Orchard into the future, said Jim Geraghty, chairman of the Orchard board of directors. In addition, Frank Thomas proven track record of success in leading operations, corporate finance and commercialization at a number of publicly traded life sciences companies will continue to be invaluable in his expanded role. On behalf of the entire Board of Directors, Id like to personally thank Mark for his many contributions to building Orchard into a leading gene therapy company over the last three years and wish him all the best in his future endeavors.

One of the companys principal scientific founders, Dr. Gaspar has served on Orchards board of directors and has driven its research, development and regulatory strategy since its inception. Over the course of his long career he has been a leading force in the development of hematopoietic stem cell (HSC) gene therapy bringing it from some of the first studies in patients to potential regulatory approvals. Dr. Gaspars unparalleled expertise, in addition to his deep relationships with key physicians and treatment centers around the world, will continue to be integral to efforts to identify and treat patients with metachromatic leukodystrophy (MLD) and other diseases through targeted disease education, early diagnosis and comprehensive newborn screening.

Dr. Gaspar commented: I am honored to become Orchards next CEO at a time of such opportunity for the company and for patients with severe genetic disorders. Through the consistent execution of our strategy, our talented team has advanced a leading portfolio of gene therapy candidates, expanding our R&D, manufacturing and commercial capabilities. We will now focus on driving continued innovation and growth, as well as strong commercial preparation and execution. I look forward to providing greater detail around our commercialization plan, pipeline prioritization and how we can realize the full potential of our HSC gene therapy platform, in the coming quarter.

Mr. Thomas commented: Im excited to be part of this next phase of Orchards evolution as a gene therapy leader as we look to refine our strategic priorities, ensure financial strength through improved operating efficiencies and prepare for a new cycle of growth, which includes our anticipated upcoming launch of OTL-200 in Europe. Im confident we will achieve long-term growth and value for our shareholders while turning groundbreaking innovation into potentially transformative therapies for patients suffering from devastating, often-fatal inherited diseases.

Mr. Rothera commented: It has been a great privilege to lead Orchard and this outstanding management team for the past three years. Orchard is poised to make a huge difference to the lives of patients worldwide living with devastating rare genetic conditions. Having worked closely with Bobby for the last several years, I know that he is tremendously talented, extremely passionate about the patient-centric mission, and fully prepared to lead Orchard as it enters its next phase as a company.

About OrchardOrchard Therapeutics is a global gene therapy leader dedicated to transforming the lives of people affected by rare diseases through innovative, potentially curative gene therapies. Our ex vivo autologous gene therapy approach harnesses the power of genetically-modified blood stem cells and seeks to permanently correct the underlying cause of disease in a single administration. The company has one of the deepest gene therapy pipelines in the industry and is advancing seven clinical-stage programs across multiple therapeutic areas where the disease burden on children, families and caregivers is immense and current treatment options are limited or do not exist, including inherited neurometabolic disorders, primary immune deficiencies and blood disorders.

Orchard has its global headquarters in London and U.S. headquarters in Boston. For more information, please visit http://www.orchard-tx.com, and follow us on Twitter and LinkedIn.

Availability of Other Information About Orchard

Investors and others should note that Orchard communicates with its investors and the public using the company website (www.orchard-tx.com), the investor relations website (ir.orchard-tx.com), and on social media (twitter.com/orchard_tx and http://www.linkedin.com/company/orchard-therapeutics), including but not limited to investor presentations and investor fact sheets, U.S. Securities and Exchange Commission filings, press releases, public conference calls and webcasts. The information that Orchard posts on these channels and websites could be deemed to be material information. As a result, Orchard encourages investors, the media, and others interested in Orchard to review the information that is posted on these channels, including the investor relations website, on a regular basis. This list of channels may be updated from time to time on Orchards investor relations website and may include additional social media channels. The contents of Orchards website or these channels, or any other website that may be accessed from its website or these channels, shall not be deemed incorporated by reference in any filing under the Securities Act of 1933.

Forward-Looking Statements

This press release contains certain forward-looking statements about Orchards strategy, future plans and prospects, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include express or implied statements relating to, among other things, the companys business strategy and goals, and the therapeutic potential of Orchards product candidates, including the product candidate or candidates referred to in this release. These statements are neither promises nor guarantees and are subject to a variety of risks and uncertainties, many of which are beyond Orchards control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. In particular, the risks and uncertainties include, without limitation: the impact of the COVID-19 virus on Orchards clinical and commercial programs, the risk that any one or more of Orchards product candidates, including the product candidate or candidates referred to in this release, will not be approved, successfully developed or commercialized, the risk of cessation or delay of any of Orchards ongoing or planned clinical trials, the risk that prior results, such as signals of safety, activity or durability of effect, observed from preclinical studies or clinical trials will not be replicated or will not continue in ongoing or future studies or trials involving Orchards product candidates, the delay of any of Orchards regulatory submissions, the failure to obtain marketing approval from the applicable regulatory authorities for any of Orchards product candidates, the receipt of restricted marketing approvals, and the risk of delays in Orchards ability to commercialize its product candidates, if approved. Given these uncertainties, the reader is advised not to place any undue reliance on such forward-looking statements.

Other risks and uncertainties faced by Orchard include those identified under the heading "Risk Factors" in Orchards annual report on Form 10-K for the year ended December 31, 2019, as filed with the U.S. Securities and Exchange Commission (SEC) on February 27, 2020, as well as subsequent filings and reports filed with the SEC. The forward-looking statements contained in this press release reflect Orchards views as of the date hereof, and Orchard does not assume and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

Contacts

InvestorsRenee T. LeckDirector, Investor Relations+1 862-242-0764Renee.Leck@orchard-tx.com

MediaChristine C. HarrisonVP, Public Affairs & Stakeholder Engagement+1 202-415-0137media@orchard-tx.com

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Orchard Therapeutics Appoints Company Founder and Gene Therapy Pioneer Bobby Gaspar, MD, Ph.D., as New Chief Executive Officer - BioSpace

Tessa Therapeutics to launch first CAR-T therapy for Hodgkin’s lymphoma (HL) – BSA bureau

TT11 will replace stem cell transplants as standard of care in Hodgkins lymphoma, says GlobalData

Tessa Therapeutics TT11 has become the first CAR-T therapy to receive the Food and Drug Administration (FDA) regenerative medicine advanced therapy (RMAT) designation and is set to become the leading cell-based therapy in Hodgkins lymphoma (HL), displacing the outdated stem cell transplants as the standard of care by 2024, says GlobalData, a leading data and analytics company.

Miguel Ferreira, MSc, Oncology and Hematology Analyst at GlobalData, comments: TT11, beingthe first CAR-T therapy to emerge from the HL pipeline, will benefit from being the first to market and with no other CAR-T therapies closing in, GlobalData expects TT11 to comfortably take the lead as the sole cell-based treatment for HL. This is further supported by key opinion leaders (KOLs) interviewed by GlobalData, who have shown preference for CAR-T clinical trials for their patients when possible.

Tessa Therapeutics TT11 became the 47th drug to receive RMAT designation, making it an ideal candidate to emerge from the HL pipeline. The data leading to this designation demonstrated a significant complete response (CR) rate of 66.7% in patients who had failed multiple lines of treatment which is a highly encouraging result. The pivotal Phase II trial is planned to take place in Q4 2020 and to run for two years. GlobalData believes that Tessa Therapeutics will discuss surrogate endpoints with the FDA to apply for regulatory approval based on the RMAT designation.

Ferreira adds: The current landscape of second-line treatment in HL is only partially set in stone. Salvage treatment and stem cell transplants are the standard of care, though the toxicity and impact in quality of life of patients labels this approach as outdated and highly toxic despite response benefit. A new treatment that can displace or replace stem cell transplants to improve the response, quality of life, as well as treatable population in HL second line, has been highly anticipated.

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Tessa Therapeutics to launch first CAR-T therapy for Hodgkin's lymphoma (HL) - BSA bureau

Fate Therapeutics: Potential Catalysts Ahead – Seeking Alpha

Today, we will see why Fate Therapeutics (FATE) is an attractive pick in March 2020.

Fate Therapeutics is a clinical-stage biopharmaceutical company focused on the development of next-generation cellular immunotherapies for cancer and immune disorders. The company has pioneered proprietary iPSC (induced pluripotent stem cell) platform technology to develop off-the-shelf cell-based cancer immunotherapy products. Current patient-derived autologous and allogeneic cell therapies suffer from drawbacks such as high costs, manufacturing complexity, product heterogeneity, and high turnaround time. These methods, including patient and donor-derived approaches to cell therapy, also require batch-to-batch sourcing and engineering of millions of primary cells.

Fate Therapeutics aims to be the game-changer in cell-based cancer immunotherapy space by enabling the development of off-the-shelf cell products derived from master cell lines. The company aims to develop less costly, homogenous, and multi-dose or multi-cycle cell therapies with small turnaround time. The resultant cell therapy products are expected to be well-defined and uniform in the composition and can be mass-produced at a significant scale in a cost-effective manner and can be delivered off-the-shelf for broad patient accessibility.

The company's cell therapy pipeline comprises immune-oncology programs including off-the-shelf NK- and T-cell product candidates derived from master iPSC lines, and immuno-regulatory programs, including product candidates to prevent life-threatening complications in patients undergoing hematopoietic cell transplantation and to promote immune tolerance in patients with autoimmune disease.

Human-induced Pluripotent Stem cells are generated by reprogramming adult somatic cells to a pluripotent state. Fibroblasts are the most commonly used primary somatic cell type for the generation of induced pluripotent stem cells. They are reprogrammed using retroviruses. Pluripotent cells are capable of differentiating in all cell types that make up the body.

A single human iPSC can potentially differentiate into more than 200 cell types and provides a renewable source for making cells.

NK (natural killer) cells are the body's first line of defense against tumors and various pathogens. Fate Therapeutics is leveraging its iPSC platform to produce off-the-shelf NK cell therapy products.

FT500 is Fate Therapeutics' first off-the-shelf iPSC-derived NK-cell product candidate. The FT500 study is an open-label, multi-dose Phase 1 clinical trial designed to evaluate FT500 for the treatment of advanced solid tumors.

The dose-escalation stage of the study was originally designed to assess the safety and tolerability of three once-weekly doses of FT500, without IL-2 cytokine support, as a monotherapy and in combination with one of three FDA-approved ICI (immune checkpoint inhibitor) therapies in patients that have failed prior ICI therapy.

Data for the first 12 patients in the Phase 1 study has demonstrated clean safety for the iPSC platform. The cutoff date considered was November 28, 2019. It was seen that there were no reported dose-limiting toxicities, no FT500 related Grade 3 or greater adverse events or serious adverse events, and no incidents of cytokine release syndrome, neurotoxicity, or graft-versus-host disease.

Further, the trial also involved the evaluation of a multi-dose treatment course consisting of outpatient lympho-conditioning followed by three once-weekly doses of FT500 over up to two 30-day treatment cycles. Here, based on patients' T-cell and antibody repertoire, no anti-product immune responses against FT500 were evident over the multi-dose treatment course.

A total of 62 doses of FT500 were administered to these 12 patients in a safe and well-tolerated manner. Initial clinical data thus provides strong evidence that multiple doses of iPSC-derived NK-cells can be delivered off-the-shelf without patient matching.

In December 2019, the company disclosed plans to amend the trial protocol by including IL-2 cytokine support with each dose of FT500 after completion of 300 million cells per dose cohort in the ICI combination arm. The company has commenced dose-expansion part of Phase 1 trial with 300 million cells per dose and is focusing on enrolling NSCLC patients who are refractory to or have relapsed following CBT. This tumor type is highly susceptible to NK-cell recognition and killing. The study is enrolling at three clinical sites in the U.S. Fate Therapeutics expects expansion data readout from the trial in the second half of 2020.

Fate Therapeutics is studying the second product candidate from iPSC product platform and off-the-shelf NK-cell cancer immunotherapy, FT516, in an open-label, multi-dose Phase 1 trial. This product has been engineered to augment antibody-dependent cellular cytotoxicity.

In December 2019, the company announced results for two patients dosed with FT516. FT516 was administered as a monotherapy to the first patient who was suffering from relapsed/refractory AML (acute myeloid leukemia). The company dosed FT516 in combination with rituximab to the second patient who was suffering from high-risk DLBCL (diffuse large B-cell lymphoma) and had relapsed after multiple rituximab combination regimens, autologous hematopoietic stem cell transplant, and CAR (chimeric antigen receptor) T-cell therapy. The patients had received a first treatment cycle consisting of outpatient lympho-conditioning, three once-weekly doses of FT516 and IL-2 to better promote NK-cell activity.

Initial clinical data based on bone marrow biopsy at day 42 demonstrated no morphologic evidence of leukemia. There was even evidence of hematopoietic recovery following the completion of the first FT516 treatment cycle in the AML patient. There was also no circulating leukemia cells in the patient's peripheral blood. The patient even reported the recovery of neutrophils without growth factor support. The data did not demonstrate dose-limiting toxicities, although serious adverse events were seen. Initial dose escalation data may be read out in the second half of 2020.

This initial clinical evidence highlights the high probability of engineered iPSC-derived NK-cells demonstrating anti-tumor activity in AML indication. Besides, there is a body of data that has demonstrated clinical proof-of-concept for donor-derived NK-cell therapy in relapsed refractory AML and relapsed refractory DLBCL.

In December 2019, FDA accepted FT516's second IND application for studying the product in combination with PDL1, PD1, EGFR and HER2-targeting monoclonal antibody therapies in solid tumor indications. Initially, the company plans to prioritize the combination of FT516 and avelumab in patients with advanced solid tumors who are refractory to or have relapsed following, at least one line of anti-PDL1 monoclonal antibody therapy. The company plans to initiate enrollment in a clinical trial for FT516 and avelumab in mid-2020.

Fate Therapeutics is studying off-the-shelf multi-antigen targeted CAR NK-cell product candidate, FT596, in solid tumor indications.

In December 2019, Fate Therapeutics reported favorable in vivo preclinical data for FT596.

Here, in humanized mouse models of lymphoma and leukemia, FT596's efficacy was comparable to that of primary CAR T-cells in promoting tumor clearance and extending survival. FT596 combined with rituximab also showed the enhanced killing of lymphoma cells in vivo as compared to rituximab alone. FT596 can thus emerge to be best-in-class off-the-shelf treatment in B-cell malignancies. Fate Therapeutics has started enrolling patients in the open-label Phase I study. Initial dose escalation data readout on FT596 is expected in the second half of 2020.

Fate Therapeutics has high hopes for FT596, considering that initial clinical data from a donor-derived CAR19 NK-cell program at MD Anderson, demonstrated a 73% overall response rate in patients with relapsed refractory non-Hodgkin's lymphoma and chronic lymphocytic leukemia with no major toxicities. Hence, while the efficacy seemed similar to CAR T therapy, the safety profile was differentiated in favor of CAR NK-cell therapies.

Although early, this data has highlighted CAR NK-cells' capacity to confer a high level of efficacy without the CAR-T cell therapy-related toxicities. Fate Therapeutics expects FT596 to effectively replace patient-specific and allogeneic CAR19 T-cell immunotherapies. The latter single-antigen specific and hence pose a risk of disease relapse due to antigen escape as well as cause significant toxicities due to off-target activity. FT596, on the other hand, has been engineered with three active anti-tumoral functional components.

Fate Therapeutics aims to be the first company to introduce off-the-shelf iPSC-derived CAR T-cell therapy to patients, FT819, by submitting IND in the second quarter of 2020. The company expects to file an IND application for off-the-shelf CRISPR-edited, iPSC-derived NK-cell product candidate, FT538, by early May 2020. The company has also planned IND submission for FT576 in the second half of 2020.

Although Fate Therapeutics is pioneering a revolutionary approach for mass production of off-shelf cell therapy products, its pipeline is very early stage. There has not been sufficient data from its clinical programs to make an informed estimate about the success probability of these programs. In this backdrop, the company is exposed to significant R&D failure risks. In case data readouts from FT500 and FT596 clinical programs do not match expectations, the company may witness increased share price volatility.

At the end of 2019, the company had cash worth $261 million on its balance sheet. The company spent cash worth $83.2 million on operating activities in 2019. This is a proxy for the 2019 cash burn rate. We assume that the annual cash burn rate in 2020 will be around $120 million, considering that three assets have entered in-human trials. Hence, the company seems to have cash that can sustain operations until the end of 2021. However, if cash is needed at a faster pace, the company may land up requiring more funds. This can lead to equity dilution.

According to finviz, the 12-month consensus target price of Fate Therapeutics is $37.94. On March 4, Citi analyst Yigal Nochomovitz reiterated the "Buy" rating and increased target price from $26 to $41. On March 4, Barclays analyst Peter Lawson also initiated coverage of Fate Therapeutics with an Overweight rating and $40 price target.

On March 3, BMO Capital analyst Do Kim raised the firm's price target on Fate Therapeutics to $28 from $22 and reiterated the "Market Perform" rating. On March 3, Guggenheim analyst Michael Schmidt reiterated the "Buy" rating and increased target price from $25 to $41. On March 3, Roth Capital analyst Tony Butler reiterated the "Neutral" rating but increased the target price from $20 to $30. On March 3, BTIG analyst Amanda Murphy reiterated the "Buy" rating and increased target price from $27 to $42. The analyst has also raised the estimated value of the company's iPSC platform from $740 million to $2.0 billion.

On March 3, Oppenheimer analyst Matthew Biegler reiterated the "Outperform" rating and increased the target price from $27 to $36. Piper Sandler analyst, Edward Tenthoff also reiterated the "Overweight" rating and raised the target price from $28 to $57.

In September 2019, Fate Therapeutics launched in-house GMP (Good Manufacturing Practices) manufacturing facility at headquarters in San Diego, California. This is custom designed to use clonal master iPSC lines as a renewable cell source for the consistent and scaled manufacture of off-the-shelf NK-cell and CAR T-cell products. The company has already produced hundreds of cryopreserved, infusion-ready doses of FT500, FT516, and FT596 at a low cost per dose. Currently stored in inventory, these doses are immediately available for use in the clinical settings.

The full control of cGMP production and the technical expertise to genetically engineer iPSCs and create qualified clonal master lines for clinical use implies that the company has operational expertise and redundancies required for the consistent cost-effective manufacturing and clinical supply of off-the-shelf cell products.

I believe that the 12-month target price of $30 fairly reflects the growth potential as well as risks associated with early-stage Fate Therapeutics. I consider this company to be a good pick for aggressive biotech investors with an investment horizon of at least one year.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Fate Therapeutics: Potential Catalysts Ahead - Seeking Alpha

Singapore formulates novel molecular therapy to treat leukaemia – BSA bureau

Researchers in Singapore find a common therapeutic vulnerability for a genetically diverse and deadly blast crisis chronic myeloid leukaemia

Scientists and clinicians from Duke-NUS Medical School, the Agency for Science, Technology and Researchs (A*STARs) Genome Institute of Singapore (GIS), and the Singapore General Hospital (SGH), have devised a novel drug combination that could treat a particularly deadly form of leukaemia, known as blast crisis (BC) chronic myeloid leukaemia (CML).

The team has also developed strategies that may identify patients with early-stage or chronic phase (CP) CML who are at increased risk of developing BC, and potentially preventing disease progression.

CML is a blood cancer that can be controlled by continuously taking an expensive type of medicine called a tyrosine kinase inhibitor (TKI). In almost all patients, stopping TKI treatment results in recurrence of CML.

While most CML patients respond well to life-long TKI usage, about 10 per cent of patients become resistant to TKIs, and progress to late-stage or blast crisis (BC) CML. Patients with BC almost always die from their disease. While many genetic mutations are known to be associated with BC progression, the mechanisms by which they and other factors cause BC remain largely unknown. This knowledge gap prevents clinicians from identifying which CML patients are at risk of BC progression, and treating BC when it occurs.

To fill these critical gaps, we employed the latest molecular approaches to establish that the so-called polycomb repressive complex, or PRC, alters the regulation of a set of genes which drive BC progression, said Dr Tun Kiat Ko, Research Fellow at Duke-NUS Cancer and Stem Cell Biology (CSCB) programme. He also added, We found that the consequences of altered PRC activity were common to the majority of BC cases, regardless of the different leukaemia-causing mutations we also found in them.

Using this increased understanding, the team devised novel drug combinations, which reverse the downstream effects of the PRC in BC. At the same time, they also developed methods to identify CML patients who were at increased risk of developing TKI-resistance and progressing to BC.

The team is currently working on approaches to identify CML patients who are at risk of BC transformation, and also to determine why the key PRC-related events occur in the first place.

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Singapore formulates novel molecular therapy to treat leukaemia - BSA bureau

Targeting the Tumor Microenvironment – Technology Networks

The tumor microenvironment (TME) that surrounds solid cancers has long held fascination for researchers. Yet it is only relatively recently that weve understood how important the TME is for influencing progression of the disease and response to treatment. In this article we learn why its not just the tumor itself that needs to be targeted and hear about research that aims to exploit the TME, too.

Some cancers, such as prostate cancer tend to be immunologically cold, i.e. not much is happening, the immune system is not fighting the cancer, whereas melanoma is a hot tumor where immune responses are very important and these patients respond well to immunotherapy. Tabi is investigating whether these hot or cold immune phenotypes hold true in other cancers. She is particularly interested in mesothelioma, an aggressive form of lung cancer with poor survival rates.An inflammatory environment is advantageous while an immunosuppressive environment allows the tumor to progress, she explained. Mesothelioma is interesting because there are two types of mesothelioma: one is hot and the other is cold and there is nearly nothing in between. However, because there are not many immunotherapy trials in mesothelioma, we dont really know the meaning of this yet. she says.Then it gets even more complex because there are some multifocal tumors where each lump is different so within one patient, one tumor could be immunologically cold and another hot. In this scenario, it has been observed that some of the lumps can be removed with successful immunotherapy but the others cant.To test whether an anti-tumor immune response could be achieved in mesothelioma, Tabi initiated a clinical trial in mesothelioma where the patients were vaccinated with an attenuated virus that carried cancer antigens. The patients received it together with chemotherapy and they monitored the immune changes in the blood. Of the 23 patients taking part, 22 had a marked increase in their anti-tumor response1. This kind of treatment is now being tested in a combination with other, more targeted interventions. Our trial was an important step in that direction because mesothelioma is such an aggressive disease and its nearly impossible to have a complete remission and the survival rate is very low.For the future, in addition to changing the immune profile to improve the effectiveness and general outcome of immunotherapy, Tabi also highlights another important player in the TME cellular exosomes. These tiny particles are released by cells in order to communicate with each other.Exosomes are getting a lot of attention recently, as tumor cell-derived exosomes are important in changing the normal microenvironment to make it more receptive for the tumor to spread, says Tabi. Several years ago, there was an attempt to use exosomes as a cancer vaccine. We always thought that was a bad idea. Now we have the evidence to show that, yes, they carry tumor antigens, but its not possible to use them as a cancer vaccine because they have dominant immunosuppressive effects.

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Rather than look at the epithelium of these tumors and sequence them, the Grand Challenge team plans to focus on the cells that normally maintain these epithelial cells, to understand how these become distorted during inflammation and how signaling pathways between stromal cells, the extracellular matrix and the epithelium drive tumorigenesis. The team view inflammation-associated cancers as a disease process rather than individual cancer types.First, we need to characterize the stroma because its really not been done, so were probably missing lots of targets that we just dont know about, says McDonald. Then we want to use that information to try and predict which patients are going to develop cancer and which ones arent.To achieve this goal, the international Grand Challenge team will combine a broad range of technologies. First, in a discovery phase, they plan to develop maps of these chronic inflammation cancers from understanding RNA and protein expression, immune environment and creating databases to help predict or determine targets. Theyll also exploit CODEX technology (provided by Professor Garry Nolan, Stanford) which allows you to measure the expression of 60100 targets on a cell section to investigate cell-cell neighborhoods, and understand, if one cell is present how does it talk to the other cells around it?

In a subsequent development phase they will look at the targets identified from the -omics and CODEX analysis and build these into an in vitro model using organ-on-a-chip technology a model that is far more tissue-like because you can model effects such as the peristaltic motion of the bowel and blood flow on a 3D chip (Professor Don Ingber, Harvard). This will be combined with in vivo models that allow them to interrogate the effects of targeting stromal factors on stem cell biology and tumorigenesis.

McDonalds role is to take these data and apply it to patients. Well use samples from patients weve collected over time, who have progressed to cancer, and try to identify which factors predict progression and which ones dont, he explains.

One of challenges from a clinical perspective with chronic inflammation cancers is that very few people with the inflammatory condition go on to develop cancer. In Barretts esophagus, the progression rate per year is about 0.10.3% of all BO patients, says McDonald, yet every single person will go through a two- to five-year endoscopic surveillance program that is invasive, expensive and does not predict if they will develop cancer.

By looking at changes to the stroma over time, were trying to predict: how do these cell populations evolve? How do they talk to each other? Is the risk there when the patient develops the condition, and is it just a matter of time? Or is it something that changes at some point in the patients life? This would be an important advance in these types of cancers, because it helps with not only preventing cancers but also detecting the early-stage cancers that we sometimes miss.Reference1.Lester J, Casbard AC, Al-Taei S et al. (2018). A single centre phase II trial to assess the immunological activity of TroVax plus pemetrexed/cisplatin in patients with malignant pleural mesothelioma - the SKOPOS trial. Oncoimmunology, 7 (12): e1457597. DOI: https://doi.org/10.1080/2162402X.2018.1457597

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Targeting the Tumor Microenvironment - Technology Networks

Edited Transcript of FLXN earnings conference call or presentation 12-Mar-20 8:30pm GMT – Yahoo Finance

Woburn Mar 16, 2020 (Thomson StreetEvents) -- Edited Transcript of Flexion Therapeutics Inc earnings conference call or presentation Thursday, March 12, 2020 at 8:30:00pm GMT

* David A. Arkowitz

Flexion Therapeutics, Inc. - CFO

* Michael D. Clayman

Flexion Therapeutics, Inc. - Co-Founder, President, CEO & Director

Flexion Therapeutics, Inc. - VP of Corporate Communications & IR

The Benchmark Company, LLC, Research Division - Senior Healthcare Technology Research Analyst

Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst

* Serge D. Belanger

Good afternoon, ladies and gentlemen. And welcome to the Flexion Therapeutics Fourth Quarter and Full Year 2019 Financial Results Conference Call. My name is Daniel, and I will be your coordinator for today. (Operator Instructions)

I'll now turn the call over to the company.

Scott Young, Flexion Therapeutics, Inc. - VP of Corporate Communications & IR [2]

Thank you, Dan. Good afternoon. This is Scott Young, Vice President for Corporate Communications and Investor Relations. Before we begin, I would call your attention to the metrics slide that we will discuss in today's presentation. Those slides can be viewed directly via the webcast, in the 8-K we issued this afternoon or under the Investors tab on flexiontherapeutics.com.

In addition, our Q4 earnings press release and an archive of this conference call, can also be found there. Today's call will be led by Flexion's Chief Executive Officer, Dr. Michael Clayman; and he is joined by David Arkowitz, Flexion's Chief Financial Officer; and Melissa Layman, Flexion's newly appointed Chief Commercial Officer.

On today's call, we will be making forward-looking statements that include commercial, financial, clinical and regulatory projections. Statements relating to future financial or business performance, conditions or strategies

matters, including expectations regarding net sales, operating expenses, cash utilization, clinical, regulatory and commercial developments and anticipated milestones are forward-looking statements within the meaning of the Private Securities Litigation Reform Act.

Flexion cautions that these forward-looking statements are subject to various assumptions, risks and uncertainties, which change over time. Additional information on the factors and risks that could affect Flexion's business, financial conditions and results of operations are contained in Flexion's Form 10-K for the year ended December 31, 2019, which was filed with the SEC and other filings, which are available at http://www.sec.gov as well as Flexion's website.

These forward-looking statements speak only as of the date of this call, and Flexion assumes no duty to update such statements. I will now turn the call over to Flexion's CEO, Mike Clayman.

Michael D. Clayman, Flexion Therapeutics, Inc. - Co-Founder, President, CEO & Director [3]

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Thanks, Scott, and thank you all for joining. Today, I'll recap our commercial progress in 2019, review our life cycle management activities, provide an update on our pipeline and discuss our priorities for this year. After that, I'll turn it over to David for a deeper review of our commercial metrics and a summary of our financial performance, and then we will open the line and take questions.

To begin, as we reported today, we recorded full year ZILRETTA net sales of $73 million for 2019, which is fully in line with the preliminary unaudited revenue estimate we provided in early January. We are very pleased with our sales performance in 2019, which represents growth of more than 220%, compared to our 2018 full year net sales of $22.5 million. Those numbers tell a very compelling story, and they speak to the outstanding work of our field-based teams, the excellent coverage we have for ZILRETTA, the impact from our judicious use of volume-based rebates, but most importantly, our sales performance speaks to the remarkable experience that patients and clinicians are having with ZILRETTA. As you will see in the commercial metrics that David will review, by the end of 2019, our customers had purchased 175,000 units of ZILRETTA. While our data are limited to the account level, that number provides a reasonable surrogate for the number of patients who have been treated with ZILRETTA since it was introduced to the market in late 2017. And we know that many of those patients have received unprecedented pain relief from ZILRETTA. I say this based on real-world feedback from the countless conversations I've had with grateful ZILRETTA patients and their physicians, feedback that is wholly consistent with our compelling clinical trial data.

In fact, last year, we became aware of several professional athletes who received ZILRETTA, namely Rod Woodson, the NFL Hall of Fame Defensive back named as one of the top 100 players of all time. Michael Eruzione, the captain of the 1980 Gold medal winning U.S. Olympic Hockey team and the player who scored the game winning goal against the Russians during the Miracle On Ice; and Chris Dickerson, a former outfielder who played from the New York Yankees and other major league baseball teams. From snow blowing a driveway to playing with their children and grandchildren, to jogging for the first time in years, they all have profoundly moving stories about how ZILRETTA has helped each of them manage their knee OA pain, and thereby, improve their ability to participate in regular everyday activities. As part of our ongoing physician marketing initiatives, we brought all 3 athletes together at a major orthopedic conference last December, where they and their treating physicians, spoke to a standing room crowd of some of the country's leading sports medicine experts. They shared their stories of how ZILRETTA has helped them, and the best words I can use to describe that session are inspiring and humbling.

While all are elite athletes, their ZILRETTA stories echo the scores of e-mails and letters I've received from patients who are so grateful to reengage in things they love doing with less pain. From gardening, playing a round of golf, walking on the beach, hiking, each of these stories serves as a reminder to all of us that while we have impacted more than 175,000 patients, there are 15 million people who see their doctor every year for OA knee pain. And 5 million of them receive an intra-articular injection. The opportunity for ZILRETTA and Flexion is truly massive, which brings me back to our performance in 2019 and our goals for 2020.

Throughout the course of 2019, we saw existing practices increase their use of ZILRETTA and more than 1,600 new accounts start using the product. Today, with the benefit of 2 years in the market, we have actual claims [data that show some slight] (added by company after the call) changes in the payer mix versus our assumptions prior to launch. We now see that the actual payer mix is skewed slightly more toward Medicare, which accounts for roughly 55% of the market versus previous estimates of 50%. 40% is still commercial, but Medicaid, VA and 340B plans are making up roughly 5% of the mix. We view this modest increase in Medicare patients to be incrementally positive as Medicare patients can be injected the same-day they visit without any need for prior authorization. In addition, it is important to point out that commercial coverage for ZILRETTA remains excellent. As we discussed in December, the recent approval of our sNDA resulted in a significantly improved label, which most importantly, removed the onerous not intended for repeat administration wording in the limitation of use statement. Within days of the approval, we developed materials to help our MBMs communicate the label update and we have anecdotal feedback from the field that tells us that the changes have been very well received. While we clearly view the label update as a tailwind. We have always said that we continue to believe that the meaningful impact will be seen over the following quarters and years. From a commercial perspective, our progress in 2019 strengthens our belief that ZILRETTA can become the new standard of care for the intra-articular treatment for OA knee pain in the years ahead. While under normal circumstances, these factors would give us confidence that our 2020 ZILRETTA net sales guidance of $120 million to $135 million is both credible and achievable. Like all businesses, we are acutely attuned to the potential impacts of the coronavirus global pandemic, and we are monitoring this dynamic situation very closely. To date, we have not seen any material impacts on ZILRETTA sales, our ability to access customers or to initiate our clinical trials. However, it is impossible to predict how the outbreak could evolve in the months ahead or what impacts more aggressive social distancing or other containment efforts might have on patients or practices. Regarding our supply chain, we believe we are in a very strong position. We do not source any of our key materials from China, and we presently have approximately 10 months worth of finished product inventory in our warehouses in the U.S. Furthermore, we have an additional 12 months of API, triamcinolone acetonide at our manufacturing facility in the U.K. Again, it is impossible to predict the long-term impacts of the outbreak. But we feel very good about our ability to provide ZILRETTA to patients over the quarters ahead.

Shifting to our clinical development activities, our Phase II trial to investigate the safety and efficacy of ZILRETTA in shoulder OA and adhesive capsulitis, also known as frozen shoulder syndrome continues to advance, and we anticipate data from that trial in 2021.

As we've previously discussed, these 2 conditions combined account for roughly 800,000 injections, and they present an opportunity for us to expand the use of ZILRETTA with a subset of orthopedists, who primarily focus on sports medicine and commonly treat these conditions with steroid injections.

With respect to our pipeline, we've also been making progress with our 2 drug candidates, FX201 and FX301. FX201 is our gene therapy, which holds the potential to provide OA pain relief for at least a year, improve function and potentially modify disease. As we announced last year, the IND for FX201 was accepted by the FDA, and we recently treated the first 2 patients in our Phase I dose-ranging study. We anticipate treating approximately 15 to 24 patients, who will be followed for 104 weeks with initial readout in 2021.

Now we'll move to FX301. Our NAV 1.7 inhibitor, formulated within a thermosensitive hydrogel for administration as a peripheral nerve block for control of postoperative pain. We've held our pre-IND meeting with FDA, and we remain on track to initiate our first FX301 clinical trial in 2021.

Unlike typical local anesthetics, we believe the selective pharmacology of FX301 has the potential to deliver at least 3 to 5 days of effective pain relief, while preserving motor function, which could enable ambulation, rapid discharge from the hospital and early rehabilitation following musculoskeletal surgery.

Finally, regarding our search for a Chief Commercial Officer. We were very excited to announce the appointment of Melissa Layman earlier this week, and I'm delighted that she is able to join us for today's call. As we've said repeatedly, in our search for a CCO, we were looking for someone who had had success leading an entire commercial enterprise, who had deep experience and expertise in each of the key commercial functional domains, who had a track record as a very strong leader and who would positively contribute to our already strong culture. Because Melissa fulfills all of these criteria and is simply a terrific person to interact with. We could not be more pleased to have her take the helm of our commercial organization. Before David summarizes our fourth quarter financials and walks through the commercial metrics, I'd like to give Melissa the opportunity to make a few remarks. Melissa?

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Melissa Layman, [4]

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Thank you, Mike, and thank you for the kind words. It is such a pleasure to be here today and such an honor to join Flexion. While I've barely been in my role for a day, I can already see what an amazing group of people work here. The team has been welcoming, engaging and candid, and that was consistent throughout the entire interview process from the Executive Committee to the Board members. The commitment to patients and passion for winning has been universal, and that was one of the many reasons I wanted to join. Put simply, I can't begin to convey how excited I am about the opportunity that's ahead of us. The strong foundation that's been laid by Mike, David, Steve Meyers, and the rest of the commercial leadership team is truly impressive, and I'm looking forward to working together to grow ZILRETTA's market share and help make it the leading IA treatment in this space. Over the next few months, I'll be working intensively with our commercial organization, and I look forward to representing our commercial effort on future calls. At this point, I'll turn it over to David.

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David A. Arkowitz, Flexion Therapeutics, Inc. - CFO [5]

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Thank you, Melissa. I'll start by walking through our commercial metrics which, as Scott mentioned, can be found on our website and in the 8-K we issued today.

If you look at Slide 2, you can see that we recorded ZILRETTA net sales of $23.7 million in the fourth quarter of 2019, bringing full year 2019 net sales to $73 million. As Mike mentioned, year-over-year growth topped [220%] (corrected by company after the call). As in previous quarters, we expanded our list of target accounts in the fourth quarter to 4,972, and by December 31, 2019, we've called on almost all of them. At the end of the fourth quarter, 3,488 accounts had purchased ZILRETTA, which is an increase of nearly 360 purchasing accounts compared to the end of the third quarter.

As of the end of December, we had 2,642 accounts or 76% of all purchasing accounts place at least 1 reorder for ZILRETTA. Notably, we saw our reorder rate increase in each quarter throughout 2019, and this occurred on a successively growing customer base. Slide 3 charts our quarterly sales from launch through the fourth quarter of 2019, which provides a very compelling view of ZILRETTA's growth in the market, especially since the introduction of the permanent J Code on January 1, 2019. We do not provide quarterly guidance, but based on routine seasonality impacts, directionally, we anticipate first quarter net sales to be roughly flat versus the fourth quarter of last year.

Moving to Slide 4. This slide and the remaining 2 slides reflect purchases of ZILRETTA by accounts, which represent physician practices, clinics and hospitals of various sizes and purchasing potential. As we look at the distribution of accounts that have purchased ZILRETTA since launch, we stayed with the same groupings that we've used in previous quarters, accounts that have purchased 1 to 10 units, purchased 11 to 50 units or purchased more than 50 units. We continue to see a significant number of accounts with purchases of 1 to 10 units. And as of December 31, 2019, roughly 1,670 accounts had made purchases in this range. While approximately 1,030 accounts had purchased 11 of 50 units. In addition, 794 accounts had purchased more than 50 units, which represents growth of 150% as compared to Q1 2019 when 313 accounts had purchased in this category.

Looking at Slide number 5. You can clearly see the distribution of purchases by accounts. Those 794 accounts that have each purchased more than 50 units are in total, responsible for approximately 143,000 units or roughly 81% of all units purchased since launch. As we have mentioned previously, accounts generally move along a utilization continuum from 1 to 10 units to 11 to 50 units and then to more than 50 units. Importantly, none of our purchasing accounts has fully incorporated ZILRETTA into their practice. And this holds true for even the highest utilizers. As a result, we believe there is tremendous opportunity for us to increase utilization across each of these groups. Before I leave this slide, I would like to point out that the total ZILRETTA purchases by accounts in the fourth quarter were approximately 37,500 units, which is lower than the 48,600 units purchased in the third quarter. We believe this quarter-over-quarter reduction was primarily the result of the broad-based rebate program that we introduced in the third quarter. There was a strong amount of enthusiasm and pent-up demand for this program, and we believe that some purchases that otherwise would have occurred in the fourth quarter instead occurred in the third quarter. To a much lesser extent, we believe that the holidays in the fourth quarter had an impact on the sequential quarter reduction as well. Nevertheless, we saw total ZILRETTA purchases by accounts increased by more than 70% in the second half of 2019 versus the first half of 2019.

Moving to Slide 6. Here, we break out ZILRETTA purchases by new and existing accounts. And in the fourth quarter, we added about 350 new purchasing accounts. While we expect to eventually see a slowing in the number of new accounts coming on board each quarter, we continue to be pleased with the progress we are making with new accounts as they typically work their way through the ZILRETTA utilization continuum.

So at this point, I will briefly walk through the fourth quarter and full year 2019 financial results, which we included in the press release issued this afternoon and in our 10-K. We reported a net loss of $149.8 million for full year 2019 as compared to a net loss of $169.7 million for full year 2018. Net sales of ZILRETTA were $23.7 million for the fourth quarter of 2019 and totaled $73 million for full-year 2019. The cost of sales for full-year 2019 was $10 million. The fourth quarter 2019 net sales reflect a gross to net reduction of 11%. A gross to net reduction is primarily comprised of distributor and service fees, returns reserve, health care provider rebates and mandatory government discounts and rebates, such as Medicaid, 340B institutions, and Veterans Administration, Department of Defense. As we previously mentioned, in the third quarter, we started offering rebates to eligible health care providers that are variable based on the volume of product purchased. These provider rebates contributed 4% of the fourth quarter total gross to net reduction of 11%. Research and development expenses were $69.6 million, and $53.1 million for the years ended December 31, 2019 and 2018, respectively. The increase in research and development expenses year-over-year of $16.5 million was primarily due to an increase in salary and other related costs for additional headcount and stock-based compensation expense, an increase in expenses related to portfolio expansion and other program costs, including an upfront payment to Xenon Pharmaceuticals related to FX301, and an increase in development expenses for ZILRETTA. Selling, general and administrative expenses were $129.7 million and $121.3 million for the years ended December 31, 2019, and 2018, respectively. Selling expenses were $96.3 million and $87.3 million for the years ended December 31, 2019 and 2018, respectively. The year-over-year increase in selling expenses of $9 million was primarily due to salary and other employee-related costs and external costs related to marketing and reimbursement support activities.

General and administrative expenses were $33.4 million and $34 million for the years ended December 31, 2019 and 2018, respectively, which represents a decrease of $0.6 million year-over-year. Interest expense was $17.1 million and $15.7 million for the years ended December 31, 2019 and 2018, respectively. We expect that while our operating expenses will continue to increase in the near term, primarily driven by commercial activities in support of ZILRETTA, line extension clinical trials for ZILRETTA, continued development of FX201 and FX301 and development activities associated with future additions to the pipeline. We believe we will be able to increasingly leverage our infrastructure in support of these efforts. As of December 31, 2019, we had approximately $136.7 million in cash, cash equivalents and marketable securities compared with $258.8 million as of December 31, 2018. In addition, earlier this quarter, we fully drew down $20 million from our revolving credit facility, which is secured by our accounts receivables. We believe that our current cash balance with the expected future sales [of ZILRETTA] (added by company after the call) and the ongoing prudent management of our expenses will enable us to reach profitability. However, our projections are based on certain market assumptions, which may or may not be affected by the coronavirus pandemic. As a result, we will continue to review and reassess our [assumptions] (added by company after the call)

in light of those factors. In addition, we will remain opportunistic as it relates to potential funding decisions, and we will do what we believe is in the best long-term interest of Flexion and our shareholders.

At this point, I would ask the operator to please open the line for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions)

Our first question comes from Randall Stanicky with RBC Capital Markets.

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Daniel James Busby, RBC Capital Markets, Research Division - Senior Associate [2]

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This is Dan Busby on for Randall. A couple of questions. First, among the high-prescribing accounts, in particular, can you give us a sense of how much more room there is to grow within those practices? I think I heard you mentioned that you haven't fully penetrated any of those accounts yet. And of the physicians in those accounts who aren't using it, what's the pushback you're hearing?

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David A. Arkowitz, Flexion Therapeutics, Inc. - CFO [3]

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Yes, Dan, this is David. So as we shared in our prepared remarks and in the deck, we've got almost 800 accounts that have purchased 50 units, more than 50 units of ZILRETTA launch to date. In the vast, vast majority of those accounts, ZILRETTA has not been fully adopted, incorporated into their practices and even there's a subset within those accounts of almost 50 accounts that have purchased more than 500 of units of ZILRETTA launch to date. So there's room to run with those almost 800 accounts as well as the other accounts that are less than 50 units of ZILRETTA purchased launch to date. And in terms of the other part of your question, in terms of why have they not fully incorporated ZILRETTA at this juncture. The way this will typically work is take a practice with 5 or 6 physicians [1 or] (added by company after the call) 2 of those physicians have started to use ZILRETTA and are using ZILRETTA for their patient -- appropriate patient population. But there just hasn't been awareness and experience with ZILRETTA for the other 3 or 4 docs in the practice. So it's a process. It's a process for the docs that are treating the existing patients to talk to their colleagues or our representatives to be making those physicians that are not yet using ZILRETTA, aware of ZILRETTA, getting them comfortable with reimbursement. So that's really what is going on.

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Daniel James Busby, RBC Capital Markets, Research Division - Senior Associate [4]

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Okay, that's helpful. And I guess, as a follow-up to that, if 1 practice, if 1 or 2 physicians within a practice, have secured reimbursement? Is it typically the case that other doctors who aren't using it, but may in the future, they would have reimbursement set up already? Or is that more kind of doctor by doctor?

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David A. Arkowitz, Flexion Therapeutics, Inc. - CFO [5]

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No, it's typically at the office level, at the clinic level. But the -- it's an issue of just getting familiar and comfortable with reimbursement, experiencing reimbursement, and that takes those docs that have not achieved that to just go through the process.

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Operator [6]

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Our next question comes from Elliot Wilbur with Raymond James.

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Elliot Henry Wilbur, Raymond James & Associates, Inc., Research Division - Senior Research Analyst [7]

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A couple of questions. First, Mike, I believe you mentioned in your commentary that you expect 1Q 2020 ZILRETTA sales to be essentially flat versus 4Q '19. Just want to get maybe a little bit more color behind that? How much of that you think is attributable to high deductible plans, perhaps influencing utilization versus other factors such as seasonality or just sort of overall company conservatism kind of in light of potentially increased macro uncertainty here in the short term?

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Michael D. Clayman, Flexion Therapeutics, Inc. - Co-Founder, President, CEO & Director [8]

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Yes. So I think there are a few things, Elliot. So it's a good and important question. First, just to recognize, historically, in this space, the hyaluronic acids are typically down 10% in the first quarter, with the driver being, as you point out, deductible. That is a key driver. I think that you also have to look at an older population may be less active in the winter months. And as a result, have less need to go to their physicians. So there are a couple of reasons why there is a basis for, relatively speaking, the first quarter being softer than other quarters and why we have guided to flat in the first quarter.

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Elliot Henry Wilbur, Raymond James & Associates, Inc., Research Division - Senior Research Analyst [9]

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Okay. And then with respect to your commentary around some of the data points that emerge from the claims data that you're referring to in terms of the payer mix with Medicare representing now a higher proportion. How should we think about the relative opportunity with respect to additional growth levers such as repeat administration, bilateral administration within the context of a greater Medicare book of business versus commercial?

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Michael D. Clayman, Flexion Therapeutics, Inc. - Co-Founder, President, CEO & Director [10]

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Yes, it's a good question. We -- as you know, the Medicare population has the opportunity to benefit most directly in a sense from ZILRETTA and that physicians can use same-day without any hesitancy and proceed with confidence that they will be reimbursed. They can repeat dose without any concern about reimbursement. They can do bilateral injections, et cetera. So we like the Medicare population. We also like the commercial population. It's very straightforward with Medicare. And I would say directionally, as a modest bump up in the representation of Medicare is, wind in our sails and will improve our circumstances. As we often say, this is not a light switch, but it's directionally encouraging.

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Elliot Henry Wilbur, Raymond James & Associates, Inc., Research Division - Senior Research Analyst [11]

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Okay. And then just a couple of financial questions for David as well. With respect to SG&A trends, they've held relatively flat in the $32 million, $33 million range over the last 4 quarters, not sure kind of directionally would expect it to increase, but obviously, you've been able to get a lot more leverage out of that line than probably what we would have expected at the beginning of the year. So how should we think about progression of that number over the course of 2020?

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David A. Arkowitz, Flexion Therapeutics, Inc. - CFO [12]

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Yes, Elliot, great question. So to your point, it has been relatively flat quarter-over-quarter in 2019 the G&A component of that. So if you just look at quarterly SG&A for fourth quarter about 20 -- excuse me, about $32 million, about $8 million of it is G&A, that will stay flat in the ensuing quarters. $24 million of it is commercial. And as we've talked about before, slightly more than half of that is related to headcount and support of spend, and we are right-size from a headcount standpoint. So increases in that portion will be minimal, where we're going to see some increases over time are external marketing activities in support of increasing ZILRETTA sales. But because that's only less than half of the selling and marketing spend, you're not going to see SG&A go up by meaningful amounts quarter-over-quarter. And on top of all that, as you might imagine, we're very focused on leveraging as best we can, our SG&A infrastructure that we've built up over the past 4 quarters.

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Edited Transcript of FLXN earnings conference call or presentation 12-Mar-20 8:30pm GMT - Yahoo Finance