On April 30, 2020 Illumina, Inc. (NASDAQ: ILMN) reported its financial results for the first quarter of fiscal year 2020 (Press release, Illumina, APR 30, 2020, View Source [SID1234556843]).

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First quarter 2020 results:

•Revenue of $859 million, a 2% increase compared to $846 million in the first quarter of 2019
•GAAP net income attributable to Illumina stockholders for the quarter of $173 million, or $1.17 per diluted share, compared to $233 million, or $1.57 per diluted share, for the first quarter of 2019
•Non-GAAP net income attributable to Illumina stockholders for the quarter of $243 million, or $1.64 per diluted share, compared to $237 million, or $1.60 per diluted share, for the first quarter of 2019. Non-GAAP net income excludes expenses related to the Reverse Termination Fee and Continuation Advances paid to Pacific Biosciences of California, Inc. (PacBio) in Q1 2020 (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 $281 million compared to $198 million in the first quarter of 2019
•Free cash flow (cash flow from operations less capital expenditures) of $241 million for the quarter compared to $142 million in the first quarter of 2019

Gross margin in the first quarter of 2020 was 72.1% compared to 69.1% in the prior year period. Excluding amortization of acquired intangible assets and restructuring charges, non-GAAP gross margin was 73.0% for the first quarter of 2020 compared to 70.2% in the prior year period.

Research and development (R&D) expenses for the first quarter of 2020 were $156 million compared to $169 million in the prior year period. Excluding payroll credits related to COVID-19, non-GAAP R&D expenses as a percentage of revenue were 18.3% compared to 20.0% in the prior year period.

Selling, general and administrative (SG&A) expenses for the first quarter of 2020 were $274 million compared to $211 million in the prior year period. Excluding expenses related to the terminated acquisition with PacBio, non-GAAP SG&A expenses as a percentage of revenue were 21.1% compared to 23.0% in the prior year period.

Depreciation and amortization expenses were $44 million and capital expenditures for free cash flow purposes were $40 million during the first quarter of 2020. At the close of the quarter, the company held $3.3 billion in cash, cash equivalents and short-term investments, compared to $3.4 billion as of December 29, 2019.

"We are doing everything we can to support our employees, our customers, and communities during this pandemic," said Francis deSouza, President and CEO. "While the near-term headwind is strong, the opportunity for sequencing and genomic insights is clearer than ever. We believe that the global community will emerge from this experience more determined and more united to prepare for the next pandemic, and that genomics will be integral to that effort."

Updates since our last earnings release:

•Announced the Illumina SARS-CoV-2 Data Toolkit, a new suite of data analysis tools and workflow functionality for researchers working with the virus using next-generation sequencing (NGS)
•Donated sequencing systems and related consumables to support the expansion of SARS-CoV-2 sequencing capabilities and capacity in up to ten African countries

•Partnered with IDbyDNA to co-market IDbyDNA’s Explify Platform for use with Illumina’s NGS systems and library preparation to provide a complete, streamlined workflow solution for infectious disease applications
•Authorized a share repurchase program to repurchase $750 million of outstanding common stock and repurchased approximately $187 million of common stock in the first quarter
•Continued to strengthen the Board of Directors with the addition of Dr. Scott Gottlieb, former US FDA commissioner

Financial outlook and guidance

As previously announced on April 14, 2020, Illumina has withdrawn its fiscal 2020 full year revenue and earnings per share guidance due to the COVID-19 pandemic.

Quarterly conference call information

The conference call will begin at 2:00 pm Pacific Time (5:00 pm Eastern Time) on Thursday, April 30, 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 9492366.

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.

Statement regarding use of non-GAAP financial measures

The company reports non-GAAP results for diluted net income per share, net income, gross margins, operating expenses, operating margins, other income, and free cash flow in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The company’s financial measures under GAAP include substantial charges such as amortization of acquired intangible assets, non-cash interest expense associated with the company’s convertible debt instruments that may be settled in cash, and others that are listed in the itemized reconciliations between GAAP and non-GAAP financial measures included in this press release. Management has excluded the effects of these items in non-GAAP measures to assist investors in analyzing and assessing past and future operating performance. Additionally, non-GAAP net income attributable to Illumina stockholders and diluted earnings per share attributable to Illumina stockholders are key components of the financial metrics utilized by the company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation.

The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release.

On April 30, 2020 Gilead Sciences, Inc. (Nasdaq: GILD) reported its results of operations for the first quarter 2020 (Press release, Gilead Sciences, APR 30, 2020, View Source [SID1234556841]).

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"Gilead’s performance during the first quarter demonstrates our continued progress and highlights the strength of our underlying business. While we are prepared to navigate the uncertainty and short-term impact from the pandemic, we are confident in our ability to deliver on our long-term goals," said Daniel O’Day, Chairman and Chief Executive Officer of Gilead Sciences. "Our focus at this time is on both our work with remdesivir and our ongoing commitments to the people who depend on our medicines today."

First Quarter Financial Results
The financial results that follow represent a year-over-year comparison of the first quarter 2020 to the first quarter 2019. Total revenues for the first quarter 2020 were $5.5 billion, an increase of 5% compared to the same period in 2019. Net income for the first quarter 2020 was $1.6 billion or $1.22 per diluted share, a decrease of 21% compared to the same period in 2019. Non-GAAP net income for the first quarter 2020 was $2.1 billion or $1.68 per diluted share, essentially flat compared to the same period in 2019.

Product Sales
Total product sales for the first quarter 2020 were $5.5 billion compared to $5.2 billion for the same period in 2019. Product sales for the first quarter 2020 were $4.0 billion in the United States, $927 million in Europe and $551 million in other locations. Product sales for the first quarter 2019 were $3.8 billion in the United States, $882 million in Europe and $522 million in other locations. Total product sales for the first quarter 2020 benefited from an estimated $200 million in revenue related to increased customer buying patterns and patient prescription trends, primarily in the United States, due to the coronavirus disease (COVID-19) pandemic.

HIV product sales were $4.1 billion for the first quarter 2020 compared to $3.6 billion for the same period in 2019. The increase was primarily driven by higher sales volume as a result of the continued uptake of Biktarvy (bictegravir 50 mg/emtricitabine 200 mg/tenofovir alafenamide 25 mg) and increased customer buying patterns and patient prescription trends due to the pandemic.

Chronic hepatitis C virus (HCV) product sales were $729 million for the first quarter 2020 compared to $790 million for the same period in 2019. The decline was primarily due to lower average net selling price.

Yescarta (axicabtagene ciloleucel) generated $140 million in sales during the first quarter 2020 compared to $96 million for the same period in 2019. The increase was primarily driven by continued expansion in Europe.

Other product sales, which include Vemlidy (tenofovir alafenamide 25 mg), Viread (tenofovir disoproxil fumarate 300 mg), Letairis (ambrisentan 5 mg and 10 mg), Ranexa (ranolazine 500 mg and 1000 mg), Zydelig (idelalisib 150 mg), AmBisome (amphotericin B liposome for injection 50 mg/vial) and Cayston (aztreonam for inhalation solution 75 mg/vial), were $464 million for the first quarter 2020 compared to $696 million for the same period in 2019. The decrease was primarily due to the expected declines in Ranexa and Letairis sales after generic entries in February and May 2019, respectively.
Operating Expenses

During the first quarter 2020, compared to the same period in 2019:

R&D expenses and non-GAAP R&D expenses increased primarily due to Gilead’s ramp up of remdesivir, an investigational antiviral for the treatment of COVID-19, including approximately $50 million of manufacturing scale-up and clinical trial costs, partially offset by lower clinical trial expenses as a result of Gilead’s pause or postponement of other clinical trials resulting from the pandemic.

SG&A expenses and non-GAAP SG&A expenses increased primarily due to higher promotional expenses in the United States.
Other Income (Expense), Net

During the first quarter 2020, compared to the same period in 2019:

Other income (expense), net decreased by $525 million primarily due to unfavorable changes in the fair value of investments in equity securities, largely resulting from Gilead’s equity investment in Galapagos NV.

Cash, Cash Equivalents and Marketable Debt Securities
As of March 31, 2020, Gilead had $24.3 billion of cash, cash equivalents and marketable debt securities, compared to $25.8 billion as of December 31, 2019. During the first quarter 2020, Gilead generated $1.4 billion in operating cash flow, repaid $500 million of debt, paid cash dividends of $874 million and utilized $1.3 billion on stock repurchases. Subsequent to March 31, 2020, Gilead paid approximately $4.9 billion in cash for the acquisition of Forty Seven, Inc. (Forty Seven).
Corporate Highlights
During the first quarter 2020, Gilead continued to make progress in advancing work across each of three long-term ambitions laid out in its corporate strategy: (i) to bring 10+ transformative therapies to patients in the next 10 years; (ii) to be the biotech employer and partner of choice; and (iii) to deliver shareholder value in a sustainable and responsible manner. This progress occurred amid challenges posed by the COVID-19 pandemic and an increased focus across the organization on rapidly advancing remdesivir.
Corporate Development: In March, Gilead reached an agreement to acquire Forty Seven for approximately $4.9 billion, gaining a drug candidate, magrolimab, which is currently in Phase 1b/2 clinical studies for a number of hematological cancers. The acquisition also brings a team with expertise in immuno-oncology, an area of increased focus for Gilead. The acquisition closed in April and Gilead is now working to accelerate progress of magrolimab and grow Gilead’s immuno-oncology pipeline. Approximately $4.6 to $4.8 billion of acquired in-process R&D and other expenses, or $3.70 to $3.80 per diluted share, are expected to be recognized in earnings in the second quarter 2020 and will be excluded from the non-GAAP financial results.
Gilead entered into several additional agreements to advance its business, including a four-year strategic collaboration with Second Genome, Inc. to identify biomarkers associated with clinical response in up to five of Gilead’s pipeline compounds in inflammation, fibrosis and other diseases, and to identify potential new targets and drug candidates for the treatment of inflammatory bowel disease.
Pipeline Progress: Gilead continued to advance several pipeline programs during the first quarter 2020. Kite, a Gilead company (Kite), achieved two key regulatory milestones for KTE-X19, an investigational cell therapy for the treatment of relapsed or refractory mantle cell lymphoma. In Europe, the marketing authorization application for KTE-X19 was fully validated and is now under review by the European Medicines Agency, and in the United States, the U.S. Food and Drug Administration (FDA) accepted the Biologics License Application and granted Priority Review designation.
In HIV, key data were presented at the Conference on Retroviruses and Opportunistic Infections (CROI) in March for several approved and investigational HIV products. This included new clinical study data for Gilead’s investigational HIV-1 capsid inhibitor lenacapavir as a potential long-acting treatment for people living with HIV, results from a study of the experimental toll-like receptor 7 agonist vesatolimod, which is part of Gilead’s HIV cure research program, and additional data on Biktarvy as a treatment for HIV and Descovy for the prevention of HIV.
Expanded Approval: In March, FDA approved Epclusa for children ages 6 and older (or weighing at least 17 kg) with HCV. Epclusa is the first pan-genotypic, protease inhibitor-free regimen approved in the United States for children and adults. An estimated 23,000 to 46,000 children in the United States are living with HCV.
New Board Member: In January, Sandra J. Horning, M.D., who retired in 2019 as Chief Medical Officer and Global Head of Product Development at Roche, joined Gilead’s Board of Directors. Dr. Horning’s appointment brings significant industry and drug development expertise to the Board, as Gilead seeks to bring forward transformative new therapies as part of its corporate strategy.

Recent Developments and Insights
Gilead’s COVID-19 Response:
Advancing remdesivir: Gilead made rapid progress in advancing remdesivir as a potential treatment for COVID-19. Gilead initiated two open-label Phase 3 studies in February (the Gilead SIMPLE studies). Additional global studies are ongoing, including a global, placebo-controlled trial being led by the U.S. National Institute of Allergy and Infectious Diseases (NIAID), as well as more recently initiated studies through the World Health Organization and INSERM in France.
Yesterday, NIAID announced that the preliminary results from their trial met the primary endpoint, and remdesivir was found to shorten the time to recovery for hospitalized patients with COVID-19 when compared with a placebo. Gilead also announced topline results from the first Gilead SIMPLE study evaluating 5-day and 10-day dosing durations of remdesivir in patients with severe COVID-19 disease. The study demonstrated similar clinical improvements in patients with severe symptoms of COVID-19, regardless of whether they received five or ten days of treatment.
Gilead also took significant steps to expand remdesivir manufacturing production, announcing the expectation that more than 140,000 treatment courses of remdesivir will be manufactured by the end of May 2020. As Gilead continues to work with international partners to expand production, Gilead announced it anticipates more than one million treatment courses will be manufactured by December 2020, with plans to be able to produce several million treatment courses in 2021. However, these projections assume a 10-day dosing duration, and the number of treatment courses expected to be available may actually be higher based on the recent topline results from the first Gilead SIMPLE study, which suggests the potential for certain patients to be treated with a shorter dosing duration.
Employee health, safety and productivity support: Gilead took steps and provided resources to help ensure the health, safety and productivity of its employees, with most staff in offices around the world being asked to work remotely. Individuals with physical-location dependent roles are reporting to work, and Gilead has implemented social distancing protocols, increased cleaning and sanitization and other measures to protect those employees.
Gilead is providing additional benefits to its employees during this time, including work-from-home and certain childcare expense reimbursements, employee well-being resources, essential onsite services pay for those physical-location dependent roles, and a revised volunteer medical service paid leave policy for its employees with medical training, such as doctors, nurses and physician assistants, to help treat patients.
Community support: Gilead announced the entirety of its initial supply of remdesivir of 1.5 million individual doses will be donated free of charge through current access programs and clinical trials and for broader distribution following any potential regulatory authorizations.
Gilead announced the creation of the global Gilead CARES (COVID-19 Acute Relief and Emergency Support) Grantee Fund to provide financial support to current nonprofit grantees facing an imminent closure or termination of vital services due to losses attributable to the pandemic. The fund will provide up to $20 million in donations to these groups. Gilead also announced the following community donations: $1 million to the San Mateo County Strong Fund, which is providing financial support to individuals, small businesses and nonprofit organizations in San Mateo County where Gilead is based, and $1 million to the Mayor’s Fund for Los Angeles, which is providing support for families and small businesses, relief for healthcare workers and other services in response to the COVID-19 pandemic.
Supply chain and access to medicines: There are currently no significant manufacturing concerns or supply shortages with any Gilead products. Gilead sources various raw materials and active pharmaceutical ingredient (API) for Gilead’s products from a number of suppliers. Gilead has adequate supply of its products and does not expect any significant risk or disruption to its supply chain for the foreseeable future.
Clinical trials and research: Following a review of its clinical trials and ongoing research, Gilead has determined to continue its fully enrolled trials, temporarily postpone new trials and pause enrollment in other trials. Gilead remains committed to commencing enrollment and initiating new studies when it is appropriate to do so.

First Quarter 2020
Total product sales: Total product sales for the first quarter 2020 included an estimated $200 million in revenue related to increased customer buying patterns and patient prescription trends due to the pandemic, primarily in the United States, which is expected to reverse itself over subsequent quarters.
Research and development expense: The approximately $50 million in R&D expenses related to remdesivir exceeded the savings from Gilead’s pause on enrollment and temporary postponement of clinical trials resulting from the pandemic during the first quarter 2020.
Outlook
There is significant uncertainty about the progression and ultimate impact of the pandemic on Gilead’s business and operations. While COVID-19 did not materially impact Gilead’s first quarter results, Gilead anticipates that COVID-19 could impact its business in the short-term due to factors such as fewer patients accessing treatment for conditions such as HIV and HCV, however, the impact of these developments is uncertain. In addition to this uncertainty, during the first quarter 2020, Gilead began advancing remdesivir and rapidly expanding its manufacturing production. The total investments in remdesivir, primarily to expand manufacturing production, throughout 2020 could be material, but the amount, timing and accounting for the investments as well as the potential to recoup Gilead’s at-risk investments at some point in the future are dependent on clinical trial and regulatory outcomes. Where authorized by regulatory authorities, Gilead will focus on making remdesivir both accessible and affordable to governments and patients around the world. Further insights on the impact of the pandemic to date and remdesivir will be provided on the first quarter earnings call, and in Gilead’s first quarter 2020 earnings slides.
Gilead will continue to monitor the impact of the COVID-19 pandemic and expects to provide additional insights and outlook on its second quarter 2020 earnings call when Gilead expects there will be additional clarity on the duration and magnitude of the impact of the COVID-19 pandemic and the development of remdesivir.

On April 30, 2020 Genmab A/S (Nasdaq: GMAB) reported that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has issued a Positive Opinion recommending the use of the subcutaneous formulation of daratumumab for the treatment of adult patients with multiple myeloma in frontline and relapsed / refractory settings (Press release, Genmab, APR 30, 2020, View Source [SID1234556840]). The CHMP’s Positive Opinion for the subcutaneous formulation of daratumumab applies to all currently approved daratumumab indications in frontline and relapsed / refractory multiple myeloma settings. In August 2012, Genmab granted Janssen Biotech, Inc. (Janssen) an exclusive worldwide license to develop, manufacture and commercialize daratumumab.

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"We are very pleased with this Positive Opinion from the CHMP as it potentially brings the convenient dosing of subcutaneous daratumumab closer to becoming available for multiple myeloma patients in Europe," said Jan van de Winkel, Ph.D., Chief Executive Officer of Genmab.

The Marketing Authorization Application for this formulation was submitted to the EMA by Janssen Pharmaceutica NV in July 2019 based on data from two studies: the Phase III non-inferiority COLUMBA (MMY3012) study, which compared the subcutaneous formulation of daratumumab to the intravenous formulation in patients with relapsed or refractory multiple myeloma, and data from the Phase II PLEIADES (MMY2040) study, which is evaluating subcutaneous daratumumab in combination with certain standard multiple myeloma regimens. The topline results from the COLUMBA data were announced in February 2019 and subsequently presented in oral sessions at the 2019 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting and the 24th European Hematology Association (EHA) (Free EHA Whitepaper) Annual Congress. Updated data of the COLUMBA and the PLEIADES studies were presented during poster sessions at the 61st American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting in December 2019.

About the COLUMBA (MMY3012) study

The Phase III trial (NCT03277105) is a randomized, open-label, parallel assignment study that included 522 adults diagnosed with relapsed and refractory multiple myeloma. Patients were randomized to receive either: subcutaneous (SC) daratumumab, as 1800 mg daratumumab with rHuPH20 2000 U/mL once weekly in Cycle 1 and 2, every two weeks in Cycles 3 to 6, every 4 weeks in Cycle 7 and thereafter until disease progression, unacceptable toxicity or the end of study; or 16 mg/kg IV daratumumab once weekly in Cycle 1 and 2, every two weeks in Cycles 3 to 6, every 4 weeks in Cycle 7 and thereafter until disease progression, unacceptable toxicity or the end of study. The co-primary endpoints of the study are overall response rate and Maximum trough concentration of daratumumab (Ctrough; defined as the serum pre-dose concentration of daratumumab on Cycle 3 Day 1).

About the PLEIADES (MMY2040) study

The Phase II trial (NCT03412565) is a non-randomized, open-label, parallel assignment study that includes 265 adults either newly diagnosed or with relapsed or refractory multiple myeloma. Patients with newly diagnosed multiple myeloma are being treated with 1,800 mg SC daratumumab in combination with either bortezomib, lenalidomide and dexamethasone (D-VRd) or bortezomib, melphalan and prednisone (D-VMP). Patients with relapsed or refractory multiple myeloma are being treated with 1,800 mg SC daratumumab plus lenalidomide and dexamethasone (D-Rd). An additional

CHMP Issues Positive Opinion Recommending Subcutaneous Formulation of Daratumumab for the Treatment of Patients with Multiple Myeloma

cohort of patients with relapsed and refractory multiple myeloma treated with daratumumab plus carfilzomib and dexamethasone (D-Kd) was subsequently added to the study. The primary endpoint for the D-VMP, D-Kd and D-Rd cohorts is overall response rate. The primary endpoint for the D-VRd cohort is very good partial response or better rate.

About DARZALEX (daratumumab)

DARZALEX (daratumumab) intravenous infusion is indicated for the treatment of adult patients in the United States: in combination with bortezomib, thalidomide and dexamethasone as treatment for patients newly diagnosed with multiple myeloma who are eligible for autologous stem cell transplant; in combination with lenalidomide and dexamethasone for the treatment of patients with newly diagnosed multiple myeloma who are ineligible for autologous stem cell transplant; in combination with bortezomib, melphalan and prednisone for the treatment of patients with newly diagnosed multiple myeloma who are ineligible for autologous stem cell transplant; in combination with lenalidomide and dexamethasone, or bortezomib and dexamethasone, for the treatment of patients with multiple myeloma who have received at least one prior therapy; in combination with pomalidomide and dexamethasone for the treatment of patients with multiple myeloma who have received at least two prior therapies, including lenalidomide and a proteasome inhibitor (PI); and as a monotherapy for the treatment of patients with multiple myeloma who have received at least three prior lines of therapy, including a PI and an immunomodulatory agent, or who are double-refractory to a PI and an immunomodulatory agent.1 DARZALEX is the first monoclonal antibody (mAb) to receive U.S. Food and Drug Administration (U.S. FDA) approval to treat multiple myeloma. DARZALEX intravenous infusion is indicated for the treatment of adult patients in Europe: in combination with bortezomib, thalidomide and dexamethasone as treatment for patients newly diagnosed with multiple myeloma who are eligible for autologous stem cell transplant; in combination with lenalidomide and dexamethasone for the treatment of patients with newly diagnosed multiple myeloma who are ineligible for autologous stem cell transplant; in combination with bortezomib, melphalan and prednisone for the treatment of adult patients with newly diagnosed multiple myeloma who are ineligible for autologous stem cell transplant; for use in combination with lenalidomide and dexamethasone, or bortezomib and dexamethasone, for the treatment of adult patients with multiple myeloma who have received at least one prior therapy; and as monotherapy for the treatment of adult patients with relapsed and refractory multiple myeloma, whose prior therapy included a PI and an immunomodulatory agent and who have demonstrated disease progression on the last therapy2. The option to split the first infusion of DARZALEX over two consecutive days has been approved in both Europe and the U.S. In Japan, DARZALEX intravenous infusion is approved for the treatment of adult patients: in combination with lenalidomide and dexamethasone, or bortezomib and dexamethasone for the treatment of relapsed or refractory multiple myeloma; in combination with bortezomib, melphalan and prednisone for the treatment of patients with newly diagnosed multiple myeloma who are ineligible for autologous stem cell transplant; in combination with lenalidomide and dexamethasone for the treatment of patients with newly diagnosed multiple myeloma who are ineligible for autologous stem cell transplant. DARZALEX is the first human CD38 monoclonal antibody to reach the market in the United States, Europe and Japan. For more information, visit www.DARZALEX.com.

Daratumumab is a human IgG1k monoclonal antibody (mAb) that binds with high affinity to the CD38 molecule, which is highly expressed on the surface of multiple myeloma cells. Daratumumab triggers a person’s own immune system to attack the cancer cells, resulting in rapid tumor cell death through multiple immune-mediated mechanisms of action and through immunomodulatory effects, in addition to direct tumor cell death, via apoptosis (programmed cell death).1,2,3,4,5,6

Daratumumab is being developed by Janssen Biotech, Inc. under an exclusive worldwide license to develop, manufacture and commercialize daratumumab from Genmab. A comprehensive clinical development program for daratumumab is ongoing, including multiple Phase III studies in smoldering, relapsed and refractory and frontline multiple myeloma settings. Additional studies are ongoing or planned to assess the potential of daratumumab in other malignant and pre-malignant diseases in which CD38 is expressed, such as amyloidosis, NKT-cell lymphoma and T-cell ALL. Daratumumab has received two Breakthrough Therapy Designations from the U.S. FDA for certain indications of multiple myeloma,

CHMP Issues Positive Opinion Recommending Subcutaneous Formulation of Daratumumab for the Treatment of Patients with Multiple Myeloma

including as a monotherapy for heavily pretreated multiple myeloma and in combination with certain other therapies for second-line treatment of multiple myeloma.

On April 30, 2020 Corvus Pharmaceuticals, Inc. (NASDAQ: CRVS), a clinical-stage biopharmaceutical company focused on the development and commercialization of precisely targeted oncology therapies and the utilization of novel biomarkers to enhance patient selection, reported financial results for the first quarter ended March 31, 2020 (Press release, Corvus Pharmaceuticals, APR 30, 2020, View Source [SID1234556839]).

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"In the first quarter, we continued enrolling patients across our three clinical stage programs and reported positive data updates for ciforadenant, the Adenosine Gene Signature, and CPI-818," said Richard A. Miller, M.D., president and chief executive officer of Corvus. "With ciforadenant, CPI-006 and the Adenosine Gene Signature, we have a leadership position in the development of targeted medicines addressing the adenosine pathway. We look forward to providing another important update for ciforadenant at ASCO (Free ASCO Whitepaper), where we will present new data in renal cell cancer, including data confirming the utility of the Adenosine Gene Signature as a predictive biomarker to identify patients most likely to respond to treatment with ciforadenant."

"We also worked closely with our clinical trial sites to quickly adapt and update our study protocols to ensure patient and healthcare provider safety in light of the COVID-19 pandemic. We are pleased that this enabled enrollment and follow-up activities for patients in our studies to continue with minimal disruption. Fortunately, we have had strong enrollment in our clinical studies up to this point, allowing us to collect important clinical data as the studies mature."

Recent Achievements

Ciforadenant (CPI-444): A2A Receptor Antagonist of Adenosine

Enrolled 25 patients with advanced refractory renal cell cancer (RCC) in an amended phase 1b/2 clinical trial evaluating ciforadenant in combination with Genentech’s Tecentriq (atezolizumab), an anti-PD-L1 antibody, intended to confirm earlier results published in Cancer Discovery describing the Adenosine Gene Signature, which is designed to identify patients most likely to respond to treatment with ciforadenant. In the Cancer Discovery study, for patients with available tumor biopsies, Adenosine Gene Signature positive patients had a 17% overall response rate by RECIST criteria vs 0% in Adenosine Gene Signature negative patients. Initial clinical data from the 25-patient RCC cohort is expected to be delivered in a presentation at the 2020 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Virtual Annual Meeting in May 2020.

Presented safety and preliminary efficacy data in 35 patients with advanced refractory metastatic castrate resistant prostate cancer (mCRPC) treated with ciforadenant monotherapy and in combination with Tecentriq at the ASCO (Free ASCO Whitepaper) GU Cancer Symposium. The preliminary data indicated that ciforadenant is active in mCRPC, and that the Adenosine Gene Signature correlated with CD73 expression in tumor biopsies. Treatment and follow up in this study continues.
CPI-006: Anti-CD73 Antibody with Immunomodulatory Activity

Completed enrollment in the first two arms of the CPI-006 phase 1/1b clinical trial: monotherapy and combination with ciforadenant. The trial, which will enroll up to 350 patients, continues to enroll patients in its other two arms: combination with pembrolizumab and triplet combination with ciforadenant and pembrolizumab. Updated clinical data from the phase 1/1b clinical trial is targeted to be presented at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) annual meeting in November 2020.

Generated positive pre-clinical data demonstrating that CPI-006 activates B-cells and enhances antibody responses in vitro. Human clinical data from the ongoing clinical trial in cancer continues to demonstrate B-cell activation leading to generation of anti-tumor antibodies in some patients.
CPI-818: A small molecule ITK inhibitor

Completed enrollment in the dose escalation portion of the CPI-818 phase 1/1b clinical trial, which included patients with several types of advanced, refractory T-cell lymphomas. Based on results from this portion of the study, the Company selected the CPI-818 optimum dose and began the next portion of the study with a focus on patients with cutaneous T-cell lymphoma (CTCL).
Anticipated Events in 2020

As noted above, the Company will present updated data covering ciforadenant and the Adenosine Gene Signature in RCC at the 2020 ASCO (Free ASCO Whitepaper) Virtual Annual Meeting in May 2020.

The Company plans to meet with U.S. Food & Drug Administration (FDA) to discuss the study design and plans for a ciforadenant pivotal study in advanced refractory RCC using the Adenosine Gene Signature as a biomarker.

Updated clinical data from the CPI-006 phase 1/1b clinical trial is planned to be presented at the SITC (Free SITC Whitepaper) annual meeting in November 2020.

Updated clinical data from the CPI-818 phase 1/1b clinical trial is planned to be presented at the American Society of Hematology (ASH) (Free ASH Whitepaper) annual meeting in December 2020.
Financial Results

At March 31, 2020, Corvus had cash, cash equivalents and marketable securities totaling $68.7 million, as compared to cash, cash equivalents and marketable securities of $78.0 million at December 31, 2019. Corvus has revised its financial forecast for 2020 and now expects full year 2020 net cash used in operating activities to be between $29 million and $31 million, versus prior expectations in the range of $39 million to $42 million. The decrease is primarily related to reduced levels of both drug manufacturing and new patient enrollment in the Company’s clinical trials for the remainder of 2020 due to the impact of the COVID-19 pandemic.

Research and development expenses for the three months ended March 31, 2020 totaled $10.2 million compared to $9.4 million for the same period in 2019. The increase of $0.8 million was primarily due to a $1.3 million increase in CPI-006 clinical trial expenses, partially offset by a $0.9 million reduction in CPI-818 drug manufacturing costs.

The net loss for the three months ended March 31, 2020 was $12.9 million, compared to a net loss of $11.6 million for the same period in 2019. Total stock compensation expense for the three months ended March 31, 2020 was $1.8 million compared to $2.0 million of total stock compensation expense for the same period in 2018.

Conference Call Details
Corvus will host a conference call and webcast today, Thursday, April 30, 2020, at 4:30 p.m. ET (1:30 p.m. PT), during which time management will provide a business update and discuss the first quarter 2020 financial results. The conference call can be accessed by dialing 1-800-479-1004 (toll-free domestic) or 1-720-543-0206 (international) and using the conference ID 6494327. The live webcast may be accessed via the investor relations section of the Corvus website. A replay of the webcast will be available on Corvus’ website for 90 days.

About Corvus Pharmaceuticals
Corvus Pharmaceuticals is a clinical-stage biopharmaceutical company focused on the development and commercialization of precisely targeted oncology therapies. Corvus’ lead product candidates are ciforadenant (CPI-444), a small molecule inhibitor of the A2A receptor, and CPI-006, a humanized monoclonal antibody directed against CD73 that exhibits immunomodulatory activity and blockade of adenosine production. These product candidates are being studied in ongoing Phase 1/1b and Phase 1b/2 clinical trials in patients with a wide range of advanced solid tumors. Ciforadenant is being evaluated in a successive expansion cohort Phase 1b/2 trial examining its activity both as a single agent and in combination with an anti-PD-L1 antibody. CPI-006 is being evaluated in a multicenter Phase 1/1b clinical trial as a single agent, in combination with ciforadenant and pembrolizumab. The Company’s third clinical program, CPI-818, an oral, small molecule drug that has been shown to selectively inhibit ITK, is in a multicenter Phase 1/1b clinical trial in patients with several types of T-cell lymphomas. For more information, visit www.corvuspharma.com.

About Ciforadenant
Ciforadenant (CPI-444) is a small molecule, oral, checkpoint inhibitor designed to disable a tumor’s ability to subvert attack by the immune system by blocking the binding of adenosine in the tumor microenvironment to the A2A receptor. Adenosine, a metabolite of ATP (adenosine tri-phosphate), is produced within the tumor microenvironment where it may bind to the adenosine A2A receptor present on immune cells and block their activity. CD39 and CD73 are enzymes on the surface of tumor cells and immune cells. These enzymes work in concert to convert ATP to adenosine. In vitro and preclinical studies have shown that dual blockade of CD73 and the A2A receptor may be synergistic.

Adenosine Gene Signature
The adenosine gene signature is a biomarker that reflects adenosine induced immunosuppression in the tumor. These genes express chemokines that recruit myeloid cells including immunosuppressive tumor associated macrophages, which are thought to mediate resistance to anti-PD(L)1 treatment. To date, in our clinical trial of renal cell cancer, this biomarker has been associated with a higher rate of response to ciforadenant.

About CPI-006
CPI-006 is a potent humanized monoclonal antibody that reacts with the active site of CD73, blocking the conversion of AMP to adenosine. This antibody also possesses immunomodulatory activity resulting in activation of lymphocytes, induction of antibody production from B cells and effects on lymphocyte trafficking, which are independent of adenosine. In vitro studies of CPI-006 have shown it is capable of substantially inhibiting the production of adenosine by blocking the CD73 enzyme.

About CPI-818
CPI-818 is a small molecule drug given orally that has been shown to selectively inhibit ITK (interleukin-2-inducible T-cell kinase). It was developed to possess dual properties: to block malignant T-cell growth and modulate immune responses. ITK, an enzyme, is expressed predominantly in T-cells and plays a role in T-cell and natural killer (NK) cell lymphomas and leukemias, as well as in normal immune function. Interference with ITK signaling can modulate immune responses to various antigens. The inhibition of specific molecular targets in T-cells may be of therapeutic benefit for patients with T-cell lymphomas.

On April 30, 2020 Seattle Genetics, Inc. (Nasdaq:SGEN) reported financial results for the first quarter ended March 31, 2020 (Press release, Seattle Genetics, APR 30, 2020, View Source [SID1234556838]). The Company also highlighted ADCETRIS (brentuximab vedotin) and PADCEV (enfortumab vedotin-ejfv) commercial and development accomplishments, TUKYSA (tucatinib) U.S. Food and Drug Administration (FDA) approval and launch as well as progress with its lead programs to treat cancer.

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"We have had a remarkable start to 2020, delivering record product sales in the first quarter that are now coming from both ADCETRIS and PADCEV. Notably, strong PADCEV sales in the first full quarter of launch reflect the unmet need among patients with metastatic bladder cancer," said Clay Siegall, Ph.D., President and Chief Executive Officer of Seattle Genetics. "With the recent approval of TUKYSA for patients with metastatic HER2-positive breast cancer, we have now launched our third product just four months after our second. In addition, we are investing in potential label expansions in all three products to maximize their use to patients in need. We are also preparing for European commercial operations and have hired general managers in major European markets ahead of potential ex-U.S. approvals of TUKYSA. With two new products, growing revenues, and an advancing pipeline of novel cancer programs, we have exciting prospects for future growth."

Lead Program Highlights
ADCETRIS

Ex-U.S. Regulatory Progress: In March 2020, Takeda received a positive opinion from the European Medicines Agency’s Committee for Medicinal Products for Human Use to extend the marketing authorization for ADCETRIS to include ADCETRIS in combination with CHP (cyclophosphamide, doxorubicin, prednisone) as a treatment for adult patients with previously untreated systemic anaplastic large cell lymphoma. The positive opinion is based on results of the phase 3 ECHELON-2 trial.

Expanded Collaboration with Bristol-Myers Squibb for Trial in Early Stage Hodgkin Lymphoma: In April 2020, Seattle Genetics and Bristol-Myers Squibb agreed to co-fund an additional cohort in an ongoing trial that will evaluate the combination of ADCETRIS, OPDIVO (nivolumab) and chemotherapy for frontline stage I and II Hodgkin lymphoma.

PADCEV

Presented Updated Results from Phase 1b/2 Trial in First-Line Urothelial Cancer at 2020 ASCO (Free ASCO Whitepaper) Genitourinary Cancers Symposium: In February 2020, updated results from the EV-103 trial in patients with previously untreated locally advanced or metastatic urothelial cancer who were ineligible for treatment with cisplatin-based chemotherapy were presented at the 2020 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Genitourinary Cancers Symposium. The results in 45 patients demonstrated a confirmed objective response rate of 73.3 percent with a median follow-up of 11.5 months. Median duration of response had not been reached. The study results continued to meet outcome measures for safety.

Received Breakthrough Therapy Designation in First-line Advanced Urothelial Cancer: In February 2020, the FDA granted Breakthrough Therapy designation for PADCEV in combination with KEYTRUDA (pembrolizumab) for the treatment of patients with unresectable locally advanced or metastatic urothelial cancer who are unable to receive cisplatin-based chemotherapy in the first-line setting.

Potential Accelerated Approval Pathway for PADCEV in First-line Advanced Urothelial Cancer: In April 2020, the Company announced that based on discussions with the FDA, data from the randomized cohort K in the phase 1b/2 EV-103 trial, along with other data from the EV-103 trial evaluating PADCEV combined with Merck’s KEYTRUDA as first-line therapy for cisplatin-ineligible patients with locally advanced or metastatic urothelial cancer, could potentially support registration under accelerated approval regulations in the U.S. The primary outcome measures are objective response rate and duration of response. Seattle Genetics and its PADCEV partner, Astellas, are evaluating the combination of PADCEV and KEYTRUDA under clinical collaboration agreements with Merck.

First Patient Dosed in Phase 3 Clinical Trial in First-line Advanced Urothelial Cancer: In April 2020, the first patient was dosed in the EV-302 trial evaluating the combination of PADCEV and KEYTRUDA with or without chemotherapy versus chemotherapy alone in patients with previously untreated locally advanced or metastatic urothelial cancer. EV-302 includes metastatic urothelial cancer patients who are either eligible or ineligible for cisplatin-based chemotherapy. The trial has dual primary endpoints of progression-free survival and overall survival and is intended to support global registrations and potentially serve as a confirmatory trial if accelerated approval is granted based on EV-103.

Completed Enrollment in Second Cohort of EV-201 Trial: In April 2020, Seattle Genetics and Astellas completed enrollment in the second cohort of the EV-201 trial for patients who previously received a PD-1 or PD-L1 inhibitor but were not candidates for treatment with cisplatin chemotherapy. Data from the second cohort could potentially serve as the basis for a second PADCDEV indication.

Entered into Agreement with Merck to Evaluate PADCEV in Muscle Invasive Bladder Cancer (MIBC): In April 2020, Seattle Genetics and Astellas entered into an agreement with Merck under which Merck will amend its ongoing phase 3 trial in cisplatin-ineligible MIBC patients to include an arm evaluating PADCEV in combination with KEYTRUDA.

First Patient Dosed in Phase 2 Clinical Trial in Solid Tumors: In March 2020, the first patient was dosed in the phase 2 EV-202 clinical trial evaluating single-agent PADCEV in a range of solid tumors.
TUKYSA

Received FDA Approval: In April 2020, TUKYSA was approved by the FDA in combination with trastuzumab and capecitabine for the treatment of adult patients with advanced unresectable or metastatic HER2-positive breast cancer, including patients with brain metastases, who have received one or more prior anti-HER2-based regimens in the metastatic setting. Approval was granted four months ahead of the PDUFA target action date under the FDA’s Real-Time Oncology Review pilot program. TUKYSA is also part of Project Orbis, an initiative of the FDA Oncology Center of Excellence that provides a framework for concurrent submission and review of oncology drugs across participating global health authorities.

HER2CLIMB Data Selected for Oral Presentation at ASCO (Free ASCO Whitepaper): Additional analyses of the treatment effect of the TUKYSA regimen in metastatic HER2-positive breast cancer patients with brain metastases in the HER2CLIMB trial were selected for an oral presentation at the ASCO (Free ASCO Whitepaper) Virtual Scientific Program taking place May 29-31, 2020.

Marketing Authorization Application Validated by the EMA: In January 2020, the Marketing Authorization Application (MAA) for TUKYSA was validated by the European Medicines Agency (EMA). The EMA validation of the MAA confirms that the submission is sufficiently complete to begin the formal review process.
Tisotumab Vedotin

Tisotumab Vedotin innovaTV 204 Pivotal Trial Topline Results: Seattle Genetics and Genmab expect to report topline data late in the second or into the third quarter of 2020 for the innovaTV 204 pivotal trial of tisotumab vedotin in patients with recurrent and/or metastatic cervical cancer who have relapsed or progressed after standard of care treatment.
For additional information on Seattle Genetics’ pipeline, visit www.seattlegenetics.com/pipeline.
Legal Dispute with Daiichi Sankyo Co. Ltd.

In November 2019, Seattle Genetics submitted an arbitration demand to the American Arbitration Association regarding the ownership of certain technology used by Daiichi Sankyo in the breast cancer drug ENHERTU (DS-8201, [Fam-] trastuzumab deruxtecan), among other product candidates. The demand alleges that the linker and other antibody-drug conjugate (ADC) technology used in these agents are improvements to Seattle Genetics’ pioneering ADC technology, the ownership of which was assigned to Seattle Genetics under the terms of a 2008 collaboration agreement between the companies. On November 4, 2019, Daiichi Sankyo attempted to have the case heard in federal court. On April 27, 2020, it was ruled that the dispute should be resolved in arbitration and that the arbitration process should move forward.

FIRST QUARTER 2020 FINANCIAL RESULTS
Revenues: Total revenues in the first quarter ended March 31, 2020 increased to $234.5 million, compared to $195.2 million for the same period in 2019. Revenues are comprised of the following three components:

Royalty Revenues: Royalty revenues in the first quarter were $20.4 million, compared to $15.6 million in the first quarter of 2019. Royalty revenues are primarily driven by sales of ADCETRIS outside the U.S. and Canada by Takeda and, to a lesser extent, sales of Polivy (polatuzumab vedotin-piiq) by Roche.

Collaboration and License Agreement Revenues: Amounts earned under the Company’s ADCETRIS and ADC collaborations were $15.6 million in the first quarter, compared to $44.6 million for the same period in 2019. Collaboration revenues for the first quarter of 2019 included a $30.0 million milestone from Takeda triggered by European Commission approval of ADCETRIS in combination with chemotherapy for frontline Hodgkin lymphoma.
Research and Development (R&D) Expenses: R&D expenses in the first quarter were $195.2 million, compared to $158.3 million in the first quarter of 2019. The increase in 2020 primarily reflects increased investment in the Company’s pipeline.
Selling, General and Administrative (SG&A) Expenses: SG&A expenses in the first quarter were $122.2 million, compared to $80.3 million in the first quarter of 2019. The increase was primarily attributed to increased field sales personnel for Seattle Genetics’ recently commercialized products, PADCEV and TUKYSA, as well as higher infrastructure costs to support the Company’s continued growth.

Cost of Sales: Cost of sales in the first quarter were $29.4 million, compared to $10.3 million in the first quarter of 2019. The increase in 2020 is primarily due to the gross profit share with Astellas based on PADCEV sales, which was $16.4 million in the first quarter of 2020, as well as higher ADCETRIS sales volumes.

Non-cash, share-based compensation cost for the first three months of 2020 was $33.6 million, compared to $25.7 million for the same period in 2019.

Net Loss: Net loss for the first quarter of 2020 was $168.4 million, or $0.98 per diluted share, compared to net loss of $13.3 million, or $0.08 per diluted share, for the first quarter of 2019. Net loss in the first quarter of 2020 included a net investment loss of $59.1 million primarily associated with Seattle Genetics’ common stock holdings in Immunomedics, which are marked-to-market, compared to a net investment gain of $38.1 million in the first quarter of 2019.

Cash and Investments: As of March 31, 2020, Seattle Genetics had $799.6 million in cash and investments and holdings of Immunomedics common stock valued at $104.1 million.

2020 FINANCIAL OUTLOOK
The Company continues to monitor the impact of the COVID-19 global pandemic on its business and is taking appropriate steps to protect the safety of employees, healthcare professionals and patients. Seattle Genetics’ 2020 financial guidance remains unchanged from that provided on February 6, 2020 and is detailed below.

Conference Call Details
Seattle Genetics’ management will host a conference call and webcast with supporting slides to discuss its first quarter 2020 financial results and provide an update on business activities. The event will be held today at 1:30 p.m. Pacific Time (PT); 4:30 p.m. Eastern Time (ET). The live event and supporting slides will be simultaneously webcast and available for replay from the Seattle Genetics website at www.seattlegenetics.com, under the Investors section. Investors may also participate in the conference call by calling 888-220-8474 (domestic) or 720-452-9217 (international). The conference ID is 7835915. A replay of the audio only will be available by calling 888-203-1112 (domestic) or 719-457-0820 (international), using conference ID 7835915. The telephone replay will be available until 5:00 p.m. PT on May 3, 2020.