On January 29, 2020 Exelixis, Inc. (NASDAQ: EXEL) reported that Takeda Pharmaceutical Company Limited (Takeda), its partner responsible for the clinical development and commercialization of CABOMETYX (cabozantinib) in Japan, has applied to the Japanese Ministry of Health, Labor and Welfare (MHLW) for Manufacturing and Marketing Approval of cabozantinib as a treatment for patients with unresectable hepatocellular carcinoma (HCC) that had progressed after prior systemic therapy (Press release, Exelixis, JAN 29, 2020, View Source [SID1234553656]).

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Takeda’s application is based on the results of two clinical trials in patients with advanced HCC who had received prior systemic therapy: CELESTIAL (XL184-309), a global, randomized, placebo-controlled, double-blind phase 3 clinical trial, and Cabozantinib-2003, a phase 2 clinical trial conducted in Japan.

"We are excited about the progress our partner Takeda has made on advancing cabozantinib toward regulatory approval in Japan for patients with advanced liver cancer," said Michael M. Morrissey, Ph.D., President and Chief Executive Officer of Exelixis. "This regulatory filing is an important milestone for patients in Japan who currently have limited treatment options after they have progressed following systemic therapy. We look forward to our continued collaboration as Takeda works to bring cabozantinib to patients in need of new therapies."

Per the terms of Exelixis and Takeda’s collaboration and license agreement, Exelixis is eligible to receive a $10 million milestone payment from Takeda as a result of this latest submission for HCC, which is anticipated to be received in the first quarter of 2020. In April 2019, Takeda applied for approval to manufacture and sell cabozantinib as a treatment for unresectable and metastatic renal cell carcinoma (RCC) in Japan. Following the milestone associated with this HCC regulatory filing, Exelixis will be eligible to receive further development, regulatory and first-sale milestone payments of up to $76 million from Takeda related both to previously treated and previously untreated RCC and previously treated HCC. Exelixis continues to be eligible to receive additional development, regulatory and first-sale milestones for potential future cabozantinib indications, and is also eligible for sales revenue milestones and royalties on net sales of cabozantinib in Japan.

Takeda fully funds cabozantinib development activities that are exclusively for the benefit of Japan and is responsible for 20% of the costs associated with global cabozantinib clinical trials, providing the company opts into those trials.

About HCC

Liver cancer is a leading cause of cancer death worldwide, accounting for more than 700,000 deaths and 800,000 new cases each year.1 In the U.S., the incidence of liver cancer has more than tripled since 1980.2 HCC is the most common form of liver cancer, making up about three-fourths of the estimated 43,000 new cases in the U.S. in 2020.2 HCC is the fastest-rising cause of cancer-related death in the U.S.3 Without treatment, patients with advanced HCC usually survive less than 6 months.4

About CABOMETYX (cabozantinib)

In the U.S., CABOMETYX tablets are approved for the treatment of patients with advanced RCC and for the treatment of patients with HCC who have been previously treated with sorafenib. CABOMETYX tablets have also received regulatory approvals in the European Union and additional countries and regions worldwide. In 2016, Exelixis granted Ipsen exclusive rights for the commercialization and further clinical development of cabozantinib outside of the United States and Japan. In 2017, Exelixis granted exclusive rights to Takeda Pharmaceutical Company Limited for the commercialization and further clinical development of cabozantinib for all future indications in Japan.

Please see Important Safety Information below and full U.S. prescribing information at View Source

U.S. Important Safety Information

Hemorrhage: Severe and fatal hemorrhages occurred with CABOMETYX. The incidence of Grade 3 to 5 hemorrhagic events was 5% in CABOMETYX patients. Discontinue CABOMETYX for Grade 3 or 4 hemorrhage. Do not administer CABOMETYX to patients who have a recent history of hemorrhage, including hemoptysis, hematemesis, or melena.
Perforations and Fistulas: Gastrointestinal (GI) perforations, including fatal cases, occurred in 1% of CABOMETYX patients. Fistulas, including fatal cases, occurred in 1% of CABOMETYX patients. Monitor patients for signs and symptoms of perforations and fistulas, including abscess and sepsis. Discontinue CABOMETYX in patients who experience a fistula that cannot be appropriately managed or a GI perforation.
Thrombotic Events: CABOMETYX increased the risk of thrombotic events. Venous thromboembolism occurred in 7% (including 4% pulmonary embolism) and arterial thromboembolism in 2% of CABOMETYX patients. Fatal thrombotic events occurred in CABOMETYX patients. Discontinue CABOMETYX in patients who develop an acute myocardial infarction or serious arterial or venous thromboembolic event requiring medical intervention.
Hypertension and Hypertensive Crisis: CABOMETYX can cause hypertension, including hypertensive crisis. Hypertension occurred in 36% (17% Grade 3 and <1% Grade 4) of CABOMETYX patients. Do not initiate CABOMETYX in patients with uncontrolled hypertension. Monitor blood pressure regularly during CABOMETYX treatment. Withhold CABOMETYX for hypertension that is not adequately controlled with medical management; when controlled, resume at a reduced dose. Discontinue CABOMETYX for severe hypertension that cannot be controlled with anti-hypertensive therapy or for hypertensive crisis.
Diarrhea: Diarrhea occurred in 63% of CABOMETYX patients. Grade 3 diarrhea occurred in 11% of CABOMETYX patients. Withhold CABOMETYX until improvement to Grade 1 and resume at a reduced dose for intolerable Grade 2 diarrhea, Grade 3 diarrhea that cannot be managed with standard antidiarrheal treatments, or Grade 4 diarrhea.
Palmar-Plantar Erythrodysesthesia (PPE): PPE occurred in 44% of CABOMETYX patients. Grade 3 PPE occurred in 13% of CABOMETYX patients. Withhold CABOMETYX until improvement to Grade 1 and resume at a reduced dose for intolerable Grade 2 PPE or Grade 3 PPE.
Proteinuria: Proteinuria occurred in 7% of CABOMETYX patients. Monitor urine protein regularly during CABOMETYX treatment. Discontinue CABOMETYX in patients who develop nephrotic syndrome.
Osteonecrosis of the Jaw (ONJ): ONJ occurred in <1% of CABOMETYX patients. ONJ can manifest as jaw pain, osteomyelitis, osteitis, bone erosion, tooth or periodontal infection, toothache, gingival ulceration or erosion, persistent jaw pain, or slow healing of the mouth or jaw after dental surgery. Perform an oral examination prior to CABOMETYX initiation and periodically during treatment. Advise patients regarding good oral hygiene practices. Withhold CABOMETYX for at least 28 days prior to scheduled dental surgery or invasive dental procedures. Withhold CABOMETYX for development of ONJ until complete resolution.
Wound Complications: Wound complications were reported with CABOMETYX. Stop CABOMETYX at least 28 days prior to scheduled surgery. Resume CABOMETYX after surgery based on clinical judgment of adequate wound healing. Withhold CABOMETYX in patients with dehiscence or wound healing complications requiring medical intervention.
Reversible Posterior Leukoencephalopathy Syndrome (RPLS): RPLS, a syndrome of subcortical vasogenic edema diagnosed by characteristic finding on MRI, can occur with CABOMETYX. Evaluate for RPLS in patients presenting with seizures, headache, visual disturbances, confusion, or altered mental function. Discontinue CABOMETYX in patients who develop RPLS.
Embryo-Fetal Toxicity: CABOMETYX can cause fetal harm. Advise pregnant women and females of reproductive potential of the potential risk to a fetus. Verify the pregnancy status of females of reproductive potential prior to initiating CABOMETYX and advise them to use effective contraception during treatment and for 4 months after the last dose.
Adverse Reactions: The most commonly reported (≥25%) adverse reactions are: diarrhea, fatigue, decreased appetite, PPE, nausea, hypertension, and vomiting.
Strong CYP3A4 Inhibitors: If coadministration with strong CYP3A4 inhibitors cannot be avoided, reduce the CABOMETYX dosage. Avoid grapefruit or grapefruit juice.
Strong CYP3A4 Inducers: If coadministration with strong CYP3A4 inducers cannot be avoided, increase the CABOMETYX dosage. Avoid St. John’s wort.
Lactation: Advise women not to breastfeed during CABOMETYX treatment and for 4 months after the final dose.
Hepatic Impairment: In patients with moderate hepatic impairment, reduce the CABOMETYX dosage. CABOMETYX is not recommended for use in patients with severe hepatic impairment.

On January 29, 2020 Varian (NYSE: VAR) reported it has signed an agreement with Massachusetts General Hospital to provide seven Varian radiotherapy systems and related services for advanced cancer treatment at its clinics (Press release, Varian Medical Systems, JAN 29, 2020, View Source [SID1234553655]). Five of the systems will replace existing non-Varian systems, one will replace an existing Varian system and one will be placed in a new vault. Installation of the systems is expected to begin in late 2020.

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"We are honored Massachusetts General selected the Varian radiotherapy and radiosurgery systems for its cancer center," said John Kowal, president Varian Oncology Systems for the Americas. "We look forward to collaborating with the clinical team on the installation and use of these new systems and together helping create a world without fear of cancer."

Varian’s family of medical linear accelerators incorporate numerous technical innovations including dynamically synchronized imaging, patient positioning, motion management, and treatment delivery during a radiotherapy or radiosurgery procedure.

On January 29, 2020 Varian Reported that Results for First Quarter of Fiscal Year 2020 (Press release, Varian Medical Systems, JAN 29, 2020, View Source [SID1234553654]).

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First Quarter 2020 Summary

Oncology Systems gross orders grew 8% in dollars or 9% in constant currency in the quarter and over the trailing twelve months
Total company revenues grew 12% in dollars, or 13% in constant currency, to $829 million; organic revenues grew 8%(1)
GAAP operating earnings declined 1% at 13.3% of revenues; non-GAAP operating earnings grew 13% at 16.2% of revenues
GAAP net earnings per diluted share of $0.96; non-GAAP net earnings per diluted share of $1.16
No change to fiscal year 2020 guidance
(1) Excludes the year-over-year impact of foreign exchange and growth from our CTSI and Interventional Solutions businesses

Varian (NYSE: VAR) reported its first quarter fiscal year 2020 results.

"In the first quarter, our business fundamentals remained strong and our team delivered solid results with double-digit revenue growth in our Oncology Systems business driven by strong software and services revenue growth," said Dow Wilson, Chief Executive Officer of Varian. "We continue to make planned investments across the portfolio to scale our global sales and operations infrastructure as we execute on our long-term growth and value creation strategy."

Non-GAAP net earnings and Non-GAAP net earnings per diluted share are defined as GAAP net earnings and GAAP net earnings per diluted share adjusted to exclude the amortization of intangible assets and amortization of inventory step-up, acquisition and integration-related expenses or benefits, significant litigation charges or benefits and legal costs, gains and losses on equity investments, and significant non-recurring tax expense or benefit. Reconciliation of GAAP and non-GAAP financial measures can be found at the end of the press release.

The company ended the quarter with $722 million in cash and cash equivalents and $544 million in debt. Net cash provided by operating activities was $113 million, down $28 million, due to working capital investments to support growth. During the quarter, the company invested $46 million to repurchase three hundred and thirty-three thousand shares of common stock.

Oncology Systems Segment
Oncology Systems revenues totaled $782 million, up 11%. GAAP operating earnings were $136 million, up 10%. Gross orders were $774 million, up 8%. Gross orders in the Americas increased 7% with 4% growth in North America. In EMEA, gross orders rose 8%. In APAC, gross orders increased 9% driven by growth in China, South East Asia and Korea that was partially offset by softness in Japan.

Proton Solutions Segment
Proton Solutions revenues totaled $28 million, down 28%. The company received one new system order in the quarter. Operating earnings were impacted by project mix and updated project costs.

Other Segment
Revenues for the Other segment were $19 million. The Other segment is comprised of our Interventional Solutions business, including cryoablation, embolic microspheres, and microwave ablation. Additionally, it includes our investments in cardiac radioablation.

Non-GAAP Adjustments
This quarter, our GAAP operating earnings and GAAP EPS included a $9 million change in the fair value of contingent consideration related to our acquisitions of Endocare and Alicon. In the first quarter of fiscal year 2019, GAAP net earnings and GAAP EPS included a $22 million gain on the sale of our equity investment in Augmenix.

Guidance for Full Fiscal Year 2020
Based on solid operating performance in the first fiscal quarter and continued market and product momentum, the company is making no changes to the fiscal year 2020 guidance given during the last earnings call. The company expects earnings to be weighted towards the back-half of the fiscal year as it continues to invest in future growth. The company considers factors that can influence the business, including the strength across the portfolio, growing contribution from software and services, performance variability of the Proton Solutions segment, and the mix of mature and emerging markets.

Investor Conference Call
Varian Medical Systems is scheduled to conduct its first quarter fiscal year 2020 conference call at 1:30 p.m. Pacific Time today. To access the live webcast or replay of the call, visit the Investor Relations page on our website at www.varian.com/investors. To access the call via telephone, dial 1-877-869-3847 from inside the U.S. or 1-201-689-8261 from outside the U.S. The replay can be accessed by dialing 1-877-660-6853 from inside the U.S. or 1-201-612-7415 from outside the U.S. and entering conference ID 13697535. The teleconference replay will be available until 5:00 p.m. Pacific Time, Friday, January 31, 2020.

On January 29, 2020 Innovation Pharmaceuticals Inc. (OTCQB:IPIX) ("the Company"), a clinical stage biopharmaceutical company, has further engaged Locust Walk, a leading global life sciences transaction firm serving as its strategic advisor, to lead the Company’s out-licensing negotiations for rights to oral rinse Brilacidin for the treatment of Oral Mucositis (OM) (Press release, Innovation Pharmaceuticals, JAN 29, 2020, View Source [SID1234553652]).

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The Company had previously engaged Locust Walk to assess the value of its clinical assets, which included recently an in-depth assessment of the commercial opportunity of oral rinse Brilacidin-OM—a Phase 3-ready, FDA Fast Track-designated clinical asset in late-stage development targeting a substantial untapped market in supportive cancer care.

This renewed engagement is a continuation of Innovation Pharmaceutical’s business relationship with Locust Walk toward realizing the market potential of the Company’s pipeline.

On January 29, 2020 Illumina, Inc. (NASDAQ: ILMN) reported its financial results for the fourth quarter and fiscal year 2019 (Press release, Illumina, JAN 29, 2020, View Source [SID1234553651]).

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Fourth quarter 2019 results:

•Revenue of $953 million, a 10% increase compared to $867 million in the fourth quarter of 2018
•GAAP net income attributable to Illumina stockholders for the quarter of $239 million, or $1.61 per diluted share, compared to $210 million, or $1.41 per diluted share, for the fourth quarter of 2018
•Non-GAAP net income attributable to Illumina stockholders for the quarter of $252 million, or $1.70 per diluted share, compared to $197 million, or $1.32 per diluted share, for the fourth quarter of 2018 (see the "Reconciliation Between GAAP and Non-GAAP Net Income Attributable to Illumina Stockholders" table for a reconciliation of these GAAP and non-GAAP financial measures)
•Cash flow from operations of $443 million compared to $300 million in the fourth quarter of 2018
•Free cash flow (cash flow from operations less capital expenditures) of $386 million for the quarter compared to $235 million in the fourth quarter of 2018

Gross margin in the fourth quarter of 2019 was 69.5% compared to 68.1% in the prior year period. Excluding amortization of acquired intangible assets, non-GAAP gross margin was 70.2% for the fourth quarter of 2019 compared to 69.1% in the prior year period.

Research and development (R&D) expenses for the fourth quarter of 2019 were $161 million compared to $176 million in the prior year period. Excluding restructuring charges, non-GAAP R&D expenses as a percentage of revenue were 16.8% compared to 20.3% in the prior year period.

Selling, general and administrative (SG&A) expenses for the fourth quarter of 2019 were $233 million compared to $217 million in the prior year period. Excluding amortization of acquired intangible assets, acquisition-related expenses, and restructuring charges, non-GAAP SG&A expenses as a percentage of revenue were 22.2% compared to 24.5% in the prior year period.

Depreciation and amortization expenses were $46 million and capital expenditures for free cash flow purposes were $57 million during the fourth quarter of 2019. At the close of the quarter, the company held $3.4 billion in cash, cash equivalents and short-term investments, compared to $3.5 billion as of December 30, 2018.

Fiscal year 2019 results:

•Revenue of $3,543 million, a 6% increase compared to $3,333 million in fiscal 2018
•GAAP net income attributable to Illumina stockholders of $1,002 million, or $6.74 per diluted share, compared to $826 million, or $5.56 per diluted share, in fiscal 2018
•Non-GAAP net income attributable to Illumina stockholders of $976 million, or $6.57 per diluted share, compared to $850 million, or $5.72 per diluted share, in fiscal 2018. Non-GAAP net income excludes unrealized net gains of $66 million from mark-to-market adjustments on our strategic investments, primarily from our marketable equity securities (see the "Itemized Reconciliation Between GAAP and Non-GAAP Net Income Attributable to Illumina Stockholders" table for a reconciliation of these GAAP and non-GAAP financial measures)
•Cash flow from operations of $1,051 million compared to $1,142 million in fiscal 2018

•Free cash flow (cash flow from operations less capital expenditures) of $842 million, compared to $846 million in fiscal 2018

Gross margin for fiscal 2019 was 69.6% compared to 69.0% in the prior year. Excluding amortization of acquired intangible assets, non-GAAP gross margin was 70.6% for fiscal 2019 compared to 70.1% in the prior year period.

R&D expenses for fiscal 2019 were $647 million compared to $623 million in the prior year. Excluding restructuring charges, non-GAAP R&D expenses as a percentage of revenue were 18.2% compared to 18.7% in the prior year period.

SG&A expenses for fiscal 2019 were $835 million compared to $794 million in the prior year period. Excluding amortization of acquired intangible assets, acquisition-related expenses, and restructuring charges, non-GAAP SG&A expenses as a percentage of revenue were 22.0% compared to 23.6% in the prior year period.

"Illumina shipped a record 2,400 sequencing systems in 2019, including a record number of our high-throughput NovaSeq systems and mid-throughput NextSeq systems, reflecting strong demand for research and clinical sequencing," said Francis deSouza, President and CEO. "With the launch of our most innovative system to date in the NextSeq 2000, and a growing pipeline of clinical IVD and software solutions, Illumina continues to improve the accessibility of sequencing. Almost 17 years after the first human genome was sequenced, we believe that this is the decade that genomics becomes available to cancer and genetic disease patients on a mass scale and integrates into standard of care."

Updates since our last earnings release:

•Announced the NextSeq 1000 and NextSeq 2000 Sequencing Systems offering breakthrough system design, chemistry innovations and on-instrument integrated informatics for rapid secondary analysis
•Shared plans for additional product launches including TruSight Software Suite to enable sample-to-report for genetic disease and NovaSeq Dx to fulfill the growing interest in a Dx platform for deeper sequencing at higher throughput, and TruSight NIPT
•Partnered with Roche to broaden the adoption of distributable next-generation sequencing-based (NGS) testing in oncology
•Partnered with Genomics England to provide sequencing services to the United Kingdom’s National Health Service to sequence 300,000 to 500,000 whole genomes by 2025
•Mutually terminated the merger agreement with Pacific Biosciences
•Filed patent infringement suits against BGI in Sweden and the United Kingdom
•Repurchased $63 million of outstanding common stock in the fourth quarter of 2019 under the previously announced share repurchase program, which had a remaining balance of approximately $226 million as of December 29, 2019

Financial outlook and guidance

The non-GAAP financial guidance discussed below reflects certain pro forma adjustments to assist in analyzing and assessing our core operational performance. Please see our Reconciliation of Non-GAAP Financial Guidance included in this release for a reconciliation of the GAAP and non-GAAP financial measures.

For fiscal 2020, the company expects year over year revenue growth in the range of 9% to 11%, and expects GAAP earnings per diluted share of $6.45 to $6.65 and non-GAAP earnings per diluted share of $6.80 to $7.00. GAAP guidance does not include any potential impact resulting from the termination of our merger agreement with Pacific Biosciences on January 2, 2020.

Quarterly conference call information

The conference call will begin at 2:00 pm Pacific Time (5:00 pm Eastern Time) on Wednesday, January 29, 2020. Interested parties may access the live teleconference through the Investor Info section of Illumina’s website under the "Company" tab at www.illumina.com. Alternatively, individuals can access the call by dialing 1 (866) 211-4597 or 1 (647) 689-6853 outside North America, both with conference ID 2966099.

A replay of the conference call will be posted on Illumina’s website after the event and will be available for at least 30 days following.