Oct 28, 2016
Executives
Sarah Kiely - Manager, IR & Corporate Communications Mark Enyedy - President & CEO Anna Berkenblit - Chief Medical Officer Dave Johnston - CFO
Analysts
Mara Goldstein - Cantor Fitzgerald Biren Amin - Jefferies Boris Peaker - Cowen and Company John Newman - Canaccord Genuity Michael Schmidt - Leerink Partners
Operator
Welcome everyone to the ImmunoGen Quarterly Conference Call. Today's call is being recorded.
At this time for opening remarks and introduction I would like to turn the call over to Sarah Kiely, Manager, Investor Relations and Corporate Communications. Please go ahead.
Sarah Kiely
Thank you. Good morning and thank you for joining today's call.
Earlier today we issued a press release that includes a summary of our recent progress and financial results for the quarter ended September 30th, 2016. You can find this press release on our website.
On our call today are CEO, Mark Enyedy will provide highlights related to ImmunoGen's strategic priorities and our Chief Financial Officer, Dave Johnston will discuss our financial results and guidance. We will then open the call to questions, and Anna Berkenblit, ImmunoGen's Chief Medical Officer will join Mark and Dave for this portion of the call.
During today's call, we will be making forward-looking statements. Our actual results may differ materially from such statements.
Descriptions of the risks and uncertainties associated with an investment in ImmunoGen are included in our SEC filings which also can be accessed through our website. With that I'll now turn the call over to Mark.
Mark Enyedy
Thanks Sarah. We're pleased to be with you today to discuss our financial and operating results for the last quarter.
We respect your time and in light of our recent business update our comments this morning will be brief. Last month we announced the completion of a strategic review of our operations designed to strengthen the business and drive long-term growth.
As a result of this initiative, we moved forward with a plan to create a leaner, more agile company, better positioned to achieve our mission and deliver on our core objectives. We continue to make significant progress with the business and for today's call I'll briefly cover the highlights from last quarter, as well as outline a few key events for the coming months.
Our top priority is executing on a speed to market strategy to complete development and obtain full approval from mirvetuximab soravtansine and platinum-resistant ovarian cancer. We're excited about our forward-one [ph] Phase-3 trial which is on track to begin before the end of the year.
As a reminder this study will enroll 333 patients randomized two to one to receive either mirvetuximab or physicians choice of [indiscernible] in the control arm. To be eligible patients will need to have been diagnosed with platinum-resistant ovarian cancer, have been treated with up to three prior regimens and have medium or high levels of folate receptor alpha expression.
The primary end point 401 [ph] is progression free survival, which will be assessed in the entire population and in the subset of patients with high levels of folate receptor alpha expression. FORWARD II our Phase 1B2 trial of mirvetuximab combination is currently enrolling in the U.S., Canada and Europe.
Recent progress with this study includes the first patient dosed in -- through the cohort and following successful completion of dose escalation of Phase 2 expansion cohort is now enrolling that is assessing the combination with Avastin, where we’re using the full label dose for Avastin and a full dose of mirvetuximab we expect to begin reporting data from FORWARD II in 2017, in addition we received word on Wednesday that the manuscript for the 46 patient mirvetuximab cohort reported at ASCO this has been accepted for publication in JCO and we appreciate the recognition for this important study. Turning now to our early stage portfolio we continue to advance our IGN programs.
IGN is the term we use to refer to our highly potent DNA acting agents. These agents alkylate DNA without cross linking it which in in preclinical models has demonstrated significant efficacy and important tolerability benefits that we believe will enable repeated dosing.
There are currently two IGN ADCs in our proprietary development portfolio. IMGN779 and IMGN632 and preclinical data for both of these programs were reported at the upcoming ASH Annual Meeting in December including an oral presentation for 632.
As a reminder, 779 is currently in Phase 1 testing, in acute myeloid leukemia and we expect to report the first clinical data from the study in 2017. For 632 we expect to file an IND and begin Phase 1 testing in 2017.
We will continue to update you on our progress with these programs as we move to the end of the year and into 2017. So with that let me turn the call over to Dave to talk about our financials.
Dave Johnston
Thanks, Mark. The financials were discussed in detail in our press release issued this morning so I'm just going to review the highlights and updated guidance for the six-month period that is ending December 31st.
Also as a reminder effective January 1, we're going to be changing our financial reporting cycle to align with the calendar year so we will issue guidance for 2017, in the early part of that year. Revenues for the period ending September 30th, 2016, were $7.7 million, which included about $6 million of noncash royalty revenue on sales of Kadcyla with the balance of our revenues as period being R&D support and clinical material fees.
Operating expenses in the period were approximately $47 million, which included $33 million of research and development expenses and about $10 million of G&A expenses as well as approximately $4 million of restructuring charge related to the workforce reduction we announced last month and $1 million loss on some office space that the company is seeking to sublease. We anticipate an additional $300,000 charge in the next quarter related to the restructuring and also in that quarter to begin realizing overall cost reductions related to the restructuring.
For the last quarter we reported the net loss of about $45 million, or about $0.51 per share. The cash used in operations for the period was approximate $49 million and capital expenditures were about $400,000.
For the period ending September 30th, 2016 we ended with approximately $196 million of cash and cash equivalents and a $100 million of convertible debt outstanding reflecting our financing transaction that we completed in June, that provided us with net proceeds of approximately $97 million. We're updating our guidance for the six-month period ending December 31st.
Projected revenues are expected to be between $25 million and $30 million compared to our previous guidance of between $40 million and $45 million reflecting timing of important milestones and license taking the majority of which is noncash revenue recognition. Operating expenses are now projected to be $90 million to $95 million compared to previous guidance of $95 million to $100 million and the net loss is expected to be between $70 million and $75 million compared to previous estimate of $55 to $60 million.
Cash used in operations is now expected to be between $70 million and $75 million which previously have been expected to be between $65 million and $70 million and the guidance for capital expenses is unchanged and it is expected to be between $2 million and $5 million. We expect to end the six-month period between $165 million and $170 million in cash, compared to previous guidance of $170 million to $175 million.
We expect that this will fund our operations through the interim analysis of mirvetuximab soravtansine and into the middle of 2018. So with that let me turn the call back over to Mark.
Mark Enyedy
Thanks. As we continue to make progress against our strategic priorities we anticipate a number of upcoming milestones most notably the start of our Phase 3 401 [ph] study for mirvetuximab.
With an experienced team, a robust portfolio of productive platform and a strong cash balance, ImmunoGen is well positioned for sustainable value creation. I look forward to keeping you updated on our progress as we execute on these priorities.
With that we will open the call for questions.
Operator
[Operator Instructions]. We will go first to Jessica Fye of JPMorgan.
Unidentified Analyst
This is Ryan on for Jess. I know you guys will provide 2017 guidance at a later date, but sort of broad strokes can you talk about how we should think about potential milestones for '17?
Dave Johnston
As you know, milestones are lumpy, and they depend on progress by our partners. I would count on legends of milestone fees next year to be our current projections perhaps a little bit less than this year.
Once again depending on the timing, but at this point it's hard to be a little bit more specific than that, and we will as I said earlier provide full guidance in early 2017.
Operator
We will go next to Mara Goldstein with Cantor Fitzgerald.
Mara Goldstein
I just had a question on 779 and the trial there. Does that involve any prophylactic use of steroid or tear drops in that clinical trial?
Anna Berkenblit
779 is a new platform, it's the IGN, and so we do not have any expectation that there's going to be the ocular issues that we've seen with [indiscernible], so we have not put any prophylactic steroid eyedrops in that trial.
Mara Goldstein
Okay. And if I could just ask if there's any update on the divestiture of mirvetuximab and any of the other products?
Mark Enyedy
Yes, we have some preliminary conversations ongoing at this point, and there's not much else to say on that point.
Operator
We will go next to Biren Amin with Jefferies.
Biren Amin
Just start of the financials your guidance suggests about a $25 million to $30 million burn for Q4, is that a burn-rate that we should assume going forward for 2017 per quarter?
Mark Enyedy
If you just do the math, I think that you would come to an average of about 30 to 35 per quarter moving forward.
Biren Amin
Okay. And then just on I guess the FORWARD II trial, you announced dosing of the first patient with Keytruda.
Can you just tell us if -- you know, are you I guess in the first dose of the dose escalation Phase or just I guess for little bit more color on where you are with that cohort?
Anna Berkenblit
So the first patient was dosed just I believe it was last month, so we're really just getting started, and so far so good.
Operator
We'll go next to Simos Simeonidis of RBC Capital Markets.
Unidentified Analyst
This is Matt on for Simos, thanks for taking the question. So I wanted to ask about the planned data presentation from FORWARD II coming next year.
You know, one, are you guys thinking that we'll likely see this at ASCO? And then two, what do we -- what should we expect both in terms of specific patient cohorts and then also is this likely to only dose escalation data, or is it possible we would see data from the Avastin expansion cohort, as well?
Anna Berkenblit
So we're confident that dose escalation data will be ready in time for ASCO. The expansion cohorts we're excited about them, it really will depend on enrollment and how things are going.
Operator
We'll go next to Boris Peaker from Cowen.
Boris Peaker
My first question is financial. I'm just curious on the outstanding convertible debt, is there a limit on how low you can bring down your cash balance, any other financial constraints?
Mark Enyedy
No, there aren't any covenants that are directly associated with it. It's pretty straightforward but with the five-year term, and it's a physical settlement, so this is as plain vanilla of a convert as you can imagine, but there no covenants there.
Boris Peaker
And my next question is FORWARD II study, I'm just curious if you established any kind of internal FX threshold that you would like to hit prior to advancing this combo into the future pivotal study.
Anna Berkenblit
Which combo are you specifically referring to? Because we're combining with four different drugs.
Boris Peaker
Well for any of them, or any specific internal metrics that you may share that you expect each individual combo.
Anna Berkenblit
So as you can imagine we do have benchmarks for each of them, the patient populations may be slightly different given the number of prior therapies for each of the cohorts. So for example the carboplatin cohort is in patients with platinum sensitive disease.
The other cohorts have platinum resistant decision. So yes do have internal benchmarks that would assist us in go no go decision making for those combinations.
Boris Peaker
Are you able to share what those benchmarks are?
Anna Berkenblit
No, not at this point.
Operator
We will go next to John Newman of Canaccord Genuity.
John Newman
Just one additional question on FORWARD II will you be able to tell us what the results look like based on the expression levels of folate receptor alpha next year?
Anna Berkenblit
We are collecting that data, in the combination trial the cut off for the combinations is FR alpha expression of at least two plus and at least 25% of cells. The rationale for this cut off is that given the synergy we've seen preclinically for mirvetuximab with several chemotherapies we think that patients with lower FR alpha expression may benefit even more from combing mirvetuximab with other cytotoxics.
So we are gathering that data and we expect that the distribution of patients with low medium and high in the combination trial will be similar for what we're seeing in the original trial and in the overall ovarian population, so yes.
Operator
We'll go to Michael Schmidt of Leerink Partners.
Michael Schmidt
I had one on mirvetuximab. You know, my question is really how much overlap is there, in terms of BRCA mutation and folate receptor expression, patient populations and how do you think about the competitive space evolving with PARP inhibitors entering the market in the near-term?
Anna Berkenblit
So what we know at this point is that BRCA mutant ovarian cancer and high FR alpha expressing ovarian cancer medium and high they're not mutually exclusive but they're not entirely overlapping. We know that the PARP's right now are really making a lot of progress and headway in the maintenance setting in platinum sensitive disease that’s relapsed.
You know, that's not a space where mirvetuximab is going initially. We are generating data looking at how the BRCA mutant patients that we have enrolled thus far what their FR alpha expression is and how they do with single agent mirvetuximab, and we do look forward to sharing that data in the future.
Michael Schmidt
And can you remind me Dave mentioned the interim analysis for FORWARD I in 2018, what the statistics are there in terms of potential outcomes of the interim analysis.
Anna Berkenblit
Yes. So the primary end point for the trial is progression free survival by independent radiology review and the interim analysis is after AD [ph] events and it's just a futility analysis because progression free survivals is the primary end point, we do not have an early stop for efficacy.
Operator
And at this time we have no further questions. I would like to turn the call back over to our speakers for any additional or closing comments.
Sarah Kiely
Thank you for joining us today for the call and for your interest in ImmunoGen. We'll be available for additional questions should you have any.
Thank you.
Operator
That does conclude our conference for today. We thank you for your participation.