On July 31, 2019 McKesson Corporation (NYSE:MCK) reported that revenues for the first quarter ended June 30, 2019, were $55.7 billion compared to $52.6 billion a year ago, an increase of 6% on a reported basis and an increase of 7% on an FX-adjusted basis (Press release, McKesson, JUL 31, 2019, View Source [SID1234537960]).

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On the basis of U.S. generally accepted accounting principles ("GAAP"), first-quarter earnings per diluted share from continuing operations was $2.27, compared to a loss per diluted share of $(0.69) a year ago.

First-quarter Adjusted Earnings per diluted share was $3.31, an increase of 14% compared to $2.90 a year ago, primarily driven by growth in the U.S. Pharmaceutical and Specialty Solutions segment and a lower share count, partially offset by a higher tax rate.

"McKesson is off to a strong start in fiscal 2020, and our first-quarter earnings performance exceeded our expectations," said Brian Tyler, chief executive officer. "Based on the momentum from our first-quarter results and our confidence in the full year outlook, we are raising our previous guidance range for fiscal 2020 and now expect Adjusted Earnings per diluted share of $14.00 to $14.60."

For the first quarter, McKesson used cash from operations of $51 million, and invested $111 million internally, resulting in negative free cash flow of $162 million. During the quarter, McKesson paid $46 million for acquisitions, and returned $759 million of cash to shareholders via $684 million of common stock repurchases and $75 million of dividend payments. The Board of Directors also approved a 5% increase in the quarterly dividend to $0.41 per share. The company ended the quarter with cash and cash equivalents of $1.9 billion.

U.S. Pharmaceutical and Specialty Solutions Segment

First-quarter revenues were $44.2 billion, up 8%, driven primarily by market growth, partially offset by branded to generic conversions. GAAP operating profit was $579 million and GAAP operating margin was 1.31%. Adjusted operating profit was $600 million, up 11%, and adjusted operating margin was 1.36%.
European Pharmaceutical Solutions Segment

First-quarter revenues were $6.7 billion, down 3% on a reported basis and up 3% on an FX-adjusted basis, driven primarily by market growth in the pharmaceutical distribution business. GAAP operating profit was $5 million and GAAP operating margin was 0.07%. Adjusted operating profit was $35 million, down 53%, and adjusted operating margin was 0.52%. On an FX-adjusted basis, adjusted operating profit was $37 million, down 50%, and adjusted operating margin was 0.52%, driven by the weak retail pharmacy environment in the U.K.
Medical-Surgical Solutions Segment

First-quarter revenues were $1.9 billion, up 12%, driven by an acquisition and growth in the Primary Care and Extended Care businesses. The aforementioned acquisition closed in the prior fiscal year on June 1, 2018, and has now been fully lapped. GAAP operating profit was $125 million and GAAP operating margin was 6.57%. Adjusted operating profit was $159 million, up 27%, and adjusted operating margin was 8.36%.
Other remaining businesses (primarily including McKesson Canada, McKesson Prescription Technology Solutions (MRxTS) and the equity method investment in the Change Healthcare Joint Venture (Change Healthcare))

First-quarter revenues were $3.0 billion, down 1% on a reported basis and up 2% on an FX-adjusted basis, driven primarily by growth in our MRxTS business. GAAP operating profit was $141 million and adjusted operating profit was $276 million, up 30%. On an FX-adjusted basis, adjusted operating profit was $279 million, up 31%.
Company Updates

Change Healthcare, Inc., a leading independent healthcare technology company, began trading on the Nasdaq Global Select Market under the trading symbol "CHNG" on June 27, 2019.
For the fourth year in a row, McKesson was named a ‘Best Place to Work’ for Disability Inclusion. McKesson earned a top-ranking score of 100 on the 2019 Disability Equality Index (DEI), a joint initiative of the American Association of People with Disabilities (AAPD) and Disability:IN.
Dr. Ken Washington joined McKesson’s Board of Directors as a new independent director effective July 1, 2019.
Fiscal 2020 Outlook and Change Healthcare Update

McKesson raised fiscal 2020 Adjusted Earnings per diluted share guidance to $14.00 – $14.60 from a range of $13.85 – $14.45.

Following the completion of the Change Healthcare, Inc. IPO, McKesson owns approximately 58.5% of Change Healthcare, reduced from 70%. McKesson will continue to report the equity income from its interest in Change Healthcare based on its revised equity ownership percentage and with a one-month lag.

McKesson reaffirmed the guidance range for adjusted equity earnings from Change Healthcare of approximately $250 million to $270 million in fiscal 2020. This range reflects McKesson’s revised equity ownership, and includes the expected benefit of lower interest expense for Change Healthcare driven by its repayment of long-term debt.

Dividend Declaration

The company’s Board of Directors yesterday declared a 5% increase in the regular quarterly dividend to 41 cents per share of common stock. The dividend will be payable on October 1, 2019, to stockholders of record on September 3, 2019.

Conference Call Details

The company has scheduled a conference call for today, Wednesday, July 31st, at 5:00 PM ET to discuss the company’s financial performance. A live audio webcast of the conference call will be available on McKesson’s Investor Relations website at View Source The conference call can also be accessed by dialing 323-994-2093. The password is ‘McKesson’. A telephonic replay of this conference call will be available for five calendar days. For individuals wishing to listen to the replay, the dial-in number is 719-457-0820 and the pass code is 5579684. An archive of the conference call will also be available on the company’s Investor Relations website at View Source

Upcoming Investor Events

McKesson management will be participating in the following investor conference:

Morgan Stanley 17th Annual Global Healthcare Conference, September 9-11, 2019, in New York, New York.
Audio webcasts will be available live and archived on the company’s Investor Relations website at View Source A complete listing of upcoming events for the investment community is available on the company’s Investor Relations website.

Adjusted Earnings

McKesson separately reports financial results on the basis of Adjusted Earnings. Adjusted Earnings is a non-GAAP financial measure defined as GAAP income from continuing operations, excluding amortization of acquisition-related intangible assets, transaction-related expenses and adjustments, LIFO inventory-related adjustments, gains from antitrust legal settlements, restructuring and asset impairment charges, and other adjustments. A reconciliation of McKesson’s GAAP financial results to Adjusted Earnings is provided in Schedules 2 and 3 of the financial statement tables included with this release.

The company does not provide forward-looking guidance on a GAAP basis prospectively as McKesson is unable to provide a quantitative reconciliation of this forward-looking non-GAAP measure to the most directly comparable forward-looking GAAP measure, without unreasonable effort, because McKesson cannot reliably forecast LIFO inventory-related adjustments, gains from antitrust legal settlements, restructuring and asset impairment charges, and other adjustments, which are difficult to predict and estimate. These items are inherently uncertain and depend on various factors, many of which are beyond the company’s control, and as such, any associated estimate and its impact on GAAP performance could vary materially.

FX-Adjusted

McKesson also presents its financial results on an FX-adjusted basis. The company conducts business worldwide in local currencies, including the Euro, British pound and Canadian dollar. As a result, the comparability of the financial results reported in U.S. dollars can be affected by changes in foreign currency exchange rates. FX-adjusted information is presented to provide a framework for assessing how the company’s business performed excluding the effect of foreign currency exchange rate fluctuations. The supplemental FX-adjusted information of the company’s GAAP financial results and Adjusted Earnings (Non-GAAP) is provided in Schedule 3 of the financial statement tables included with this release.

Free Cash Flow

McKesson also provides free cash flow, a non-GAAP measure. Free cash flow is defined as net cash provided by operating activities less payments for property, plant and equipment and capitalized software expenditures, as outlined in the company’s condensed consolidated statements of cash flows.

On July 31, 2019 Exelixis, Inc. (Nasdaq: EXEL) reported that it has entered into an exclusive collaboration, option and license agreement with Aurigene Discovery Technologies Limited (Aurigene), the India-based discovery biotechnology company focused on oncology and inflammatory disorders (Press release, Exelixis, JUL 31, 2019, View Source [SID1234537958]). The agreement gives Exelixis the opportunity to in-license as many as six programs from Aurigene, which has developed a focused approach to drug discovery that targets differentiated first-in-class and best-in-class opportunities with unique mechanisms of action. The deal is part of Exelixis’ ongoing strategy to build an innovative pipeline behind the company’s internally discovered, commercially available therapies, including its flagship product, CABOMETYX (cabozantinib).

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"Exelixis’ demonstrated success in bringing oncology therapies to market, as well as its own legacy of drug discovery expertise, make it a natural partner for Aurigene. We look forward to combining these complementary skills to drive potential new therapies for the patients that need them."

Under the terms of the agreement, Exelixis will make an upfront payment of $10 million for exclusive options to license three preexisting programs from Aurigene. In addition, Exelixis and Aurigene will initiate three Aurigene-led drug discovery programs on mutually agreed upon targets, in exchange for additional option payments of $2.5 million per program. Exelixis will also contribute research funding to Aurigene to facilitate discovery and preclinical development work on all six programs. As the programs mature, Exelixis will have the opportunity to exercise an exclusive option for each program up until the time of Investigational New Drug (IND) acceptance. If Exelixis decides to exercise an option, it will make an option exercise payment to Aurigene and assume responsibility for that program’s future clinical development and commercialization including global manufacturing. Aurigene will be eligible for clinical development, regulatory, and sales milestones, as well as royalties on sales. Under the terms of the agreement, Aurigene retains limited development and commercial rights for India and Russia.

"Aurigene has a proven track record in discovery collaborations with 14 partnered programs currently in clinical trials, including 10 trials in the United States," said Peter Lamb, Ph.D., Executive Vice President, Scientific Strategy and Chief Scientific Officer of Exelixis. "Our collaboration has the potential to enhance Exelixis’ early-stage pipeline with promising therapeutic candidates while mitigating financial risk for Exelixis through a success-based payment structure. Aurigene’s small molecule discovery expertise complements our internal discovery capabilities and gives us access to an expanded range of targets and mechanisms, including covalent inhibition and induced protein degradation. We’re excited to start working with Aurigene and are hopeful that our partnership will result in multiple clinical-stage compounds and, eventually, therapies that may benefit patients with cancer."

"Aurigene has deep expertise exploring novel mechanisms of action for discovering new, effective treatments for patients with cancer," said Murali Ramachandra, Ph.D., Chief Executive Officer of Aurigene. "Exelixis’ demonstrated success in bringing oncology therapies to market, as well as its own legacy of drug discovery expertise, make it a natural partner for Aurigene. We look forward to combining these complementary skills to drive potential new therapies for the patients that need them."

On July 31, 2019 Quanterix Corporation (NASDAQ:QTRX), a company digitizing biomarker analysis with the goal of advancing the science of precision health, reported that Kevin Hrusovsky, Chief Executive Officer, President and Chairman of Quanterix, will present at the Canaccord Genuity 39th Annual Growth Conference, on Wednesday, Aug. 7, 2019 at 9:30 a.m., EDT at the InterContinental Boston (Press release, Quanterix, JUL 31, 2019, View Source [SID1234537957]). Hrusovsky, who will also share remarks at an investor dinner the prior evening hosted by Canaccord Genuity to discuss company momentum in advancing Alzheimer’s treatments and diagnoses, will also be available for one-on-one meetings during the conference.

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"Our mission to disrupt the field of precision health has been fueled by recent product launches incorporating new technological innovations, expansion of our assay menu, greater scale and capabilities in our CLIA-certified Accelerator Service Lab, and most recently the strategic acquisition of UmanDiagnostics, which further accelerates our ability to expand the availability of Nf-L as a transformative biomarker for neurodegenerative diseases," said Hrusovsky. "These achievements demonstrate the impact of our disruptive innovation in the field of precision health, and we are excited to return to Canaccord Genuity this year to share greater insight into our growth trajectory, mission to revolutionize today’s healthcare system, and broad opportunity horizon for future value creation."

In addition to acquiring UmanDiagnostics AB and consolidating its operations in Billerica, Mass., Quanterix further solidified its position as a market leader through several recent critical milestones, including:

The expansion of Quanterix’ executive leadership team with top-tier commercial talent;
Unveiling of the Simoa HD-X Analyzer, which has already been placed with several early access customers;
Hosting of major Alzheimer’s Disease KOL dinner event at the 2019 Alzheimer’s Association International Convention;
Hrusovsky’s recognition as a 2019 Entrepreneur Of The Year in New England, one of the region’s highest business honors; and,
Completion of a nearly $50 million capital raise.
Hrusovsky will elaborate on these advances and share details regarding the Company’s unique growth strategy inside its product portfolio and commercial channel footprint.

To access the live webcast of Quanterix’ presentation, please visit the News & Events page within the investor relations section of the Quanterix website at www.quanterix.com. Replays of the webcast will be available for 90 days following the conference.

On July 31, 2019 Exicure, Inc. (OTCQB: XCUR), a pioneer in gene regulatory and immunotherapeutic drugs utilizing spherical nucleic acid (SNA) constructs, reported that its common stock will begin trading on the Nasdaq Capital Market under the symbol "XCUR" at the opening of trading on July 31, 2019, following its previously announced approval to list its common stock on the Nasdaq Capital Market (Press release, Exicure, JUL 31, 2019, View Source [SID1234537956]).

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Exicure also announced today the pricing of the previously announced underwritten public offering of 27,500,000 shares of its common stock at a price to the public of $2.00 per share. Exicure has also granted the underwriters a 30-day option to purchase up to an additional 4,125,000 shares of common stock to cover overallotments, if any. The offering is expected to close on or about August 2, 2019 subject to customary closing conditions.

Exicure expects to receive gross proceeds of $55 million from the sale of common stock in the offering, prior to deducting the underwriting discounts and commissions and estimated offering expenses payable by it. Exicure intends to use the net proceeds from the offering to advance AST-008 through a Phase 1b/2 clinical trial; to develop an SNA therapeutic candidate for a neurology condition and advance it into Phase 1 clinical trials; and for general corporate purposes.

Guggenheim Securities is acting as sole book-running manager for the offering. Chardan is acting as lead manager for the offering. H.C. Wainwright & Co. and Ladenburg Thalmann are acting as co-managers for the offering.

The securities described above are being offered by Exicure pursuant to a shelf registration statement on Form S-3 (No. 333-230175) that was declared effective by the Securities and Exchange Commission (SEC) on July 24, 2019. A preliminary prospectus supplement and accompanying prospectus relating to the offering were filed with the SEC and are available on the SEC’s website located at www.sec.gov. A final prospectus supplement and accompanying prospectus describing the terms of the offering will be filed with the SEC and will be available on the SEC’s website. Copies of the final prospectus supplement and the accompanying prospectus relating to this offering may also be obtained, when available, from: Guggenheim Securities, LLC Attention: Equity Syndicate Department, 330 Madison Avenue, New York, NY 10017 or by telephone at (212) 518-5548, or by email at [email protected].

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that state or jurisdiction.

On July 31, 2019 BioTime, Inc. (NYSE American and TASE: BTX), a clinical-stage biotechnology company developing novel cell therapies for unmet medical needs, reported it is launching a new corporate brand, including a change of its corporate name to Lineage Cell Therapeutics, Inc., effective August 12, 2019 (Press release, BioTime, JUL 31, 2019, View Source [SID1234537955]). In connection with the launch, the Company’s NYSE American ticker symbol will change to "LCTX" and will be effective at the open of the market on August 12, 2019. The Company’s former ticker symbol "BTX" will remain effective through market close as of August 9, 2019. The new website for Lineage Cell Therapeutics will be www.lineagecell.com. The Company’s new identity reflects its commitment to becoming an innovative, leading cell therapy company and highlights its extensive cell therapy platform.

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"BioTime has been a pioneering company in the field of cell therapy, but its assortment of programs and affiliates sometimes detracted from its core business and made it difficult for key audiences to fully appreciate its story. During the past three quarters, a new management team has taken aggressive steps to streamline the corporate structure, selectively convert diverse equity holdings into cash, and focus priorities on our three clinical-stage assets. With a clearer structure and clinical focus now in place, this was the right time to update our name and invite stakeholders to rediscover this exciting business," stated Brian M. Culley, the Company’s Chief Executive Officer. "Our new brand defines us within our field: we control the lineage of pluripotent cells and transplant those differentiated cell types into patients as therapeutics. The descriptive and unique logo is expressive of our core technology and refined focus. We look forward to launching our new brand on August 12th and continuing to build momentum and awareness of the Company’s mission among the investment, medical and patient communities."

The Company also will be relocating its corporate headquarters to Carlsbad, California, effective August 12, 2019. The move to San Diego County will provide the Company with proximity to world-leading academic centers, public and private cell therapy peers, and is expected to offer more centralized decision-making, cost-savings, and access to an extensive network of experienced staff.