On August 5, 2020 IVERIC bio, Inc. (Nasdaq: ISEE) reported financial and operating results for the fiscal quarter ended June 30, 2020 and provided a general business update (Press release, Ophthotech, AUG 5, 2020, View Source [SID1234562872]).

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"Following the positive results from our GATHER1 Phase 3 clinical trial of Zimura for the treatment of geographic atrophy secondary to age-related macular degeneration, our main priority is to aggressively drive patient recruitment and retention in GATHER2, our second Phase 3 clinical trial for the treatment of GA secondary to AMD," stated Glenn P. Sblendorio, Chief Executive Officer and President of IVERIC bio. "We believe GATHER1 is currently the only Phase 3 clinical trial showing early suppression of GA growth which continued for 18 months with continuous treatment. The enthusiasm, resiliency and dedication of patients, physicians and their staffs fueled by their confidence in the GATHER1 Phase 3 results are exceeding our expectations."

Mr. Sblendorio added, "During the second quarter, we strengthened our balance sheet with a public offering and a concurrent private placement. We believe this enables us to further execute on our strategy to develop and deliver retinal treatments through our Zimura, gene therapy and HtrA1 inhibitor programs, with the potential to create long-term shareholder value."

Age-Related Macular Degeneration Programs

Zimura (avacincaptad pegol): Complement C5 Inhibitor
•In June 2020, the Company announced positive 18 month results from GATHER1, its first Phase 3 clinical trial for Zimura, a novel complement C5 inhibitor, for the treatment of geographic atrophy (GA) secondary to age-related macular degeneration (AMD). The 18 month data supports the previously announced 12 month data from this trial, at which time point Zimura met the pre-specified primary efficacy endpoint with statistical significance. Zimura was generally well tolerated after 18 months of administration.

•The GATHER1 data was presented at The Association for Research in Vision and Ophthalmology (ARVO) Annual Meeting, May 3 – 7, 2020 by Karl G. Csaky, MD, T. Boone Pickens Senior Scientist and Director of the Molecular Ophthalmology Laboratory at the Retina Foundation of the Southwest, and was also presented at the American Society of Retina Specialists (ASRS) Annual Scientific Meeting, July 24 – 26, 2020 by Baruch D. Kuppermann, MD, Chairman of the Department of Ophthalmology at UC Irvine.

•In late June 2020, the Company announced that the first patient had been dosed in GATHER2, its second Phase 3 clinical trial for Zimura in development for the treatment of GA secondary to AMD. If 12 month

results from GATHER2 are positive, the Company plans to file an application with the U.S. Food and Drug Administration and the European Medicines Agency for marketing approval of Zimura for GA.

•In April 2020, the U.S. FDA granted Fast Track designation for Zimura for the treatment of GA secondary to AMD. Fast Track designation offers important benefits, including frequent interactions with the FDA and the potential eligibility for rolling submission and priority review of a New Drug Application, if relevant criteria are met.

•The Company increased the enrollment target in its ongoing Phase 2b screening clinical trial of Zimura for the treatment of autosomal recessive Stargardt disease. After initially enrolling 95 patients in this trial, the Company plans to enroll approximately 25 additional patients, with the goal of enrolling a total of 120 patients as was initially intended in the protocol for this trial.

IC-500: HtrA1 (high temperature requirement A serine peptidase 1 protein) Inhibitor
•The Company selected a lead product candidate from its HtrA1 inhibitor program, which it will refer to as IC-500. Based on current timelines, the Company is planning to submit an IND with the U.S. FDA for IC-500 in GA secondary to AMD in 2021.

Gene Therapy Programs in Orphan Inherited Retinal Diseases (IRDs)

•IC-100: Rhodopsin-Mediated Autosomal Dominant Retinitis Pigmentosa (RHO-adRP) and IC-200: BEST1-Related IRDs
Natural history studies and IND-enabling activities for IC-100 and IC-200 are ongoing. The Company plans to begin enrolling patients in Phase 1/2 clinical trials for IC-100 during the first half of 2021 and for IC-200 in 2021.

•Minigene Programs
The Company, in collaboration with the University of Massachusetts Medical School, continues to advance its minigene program for Leber Congenital Amaurosis Type 10 (LCA10), autosomal recessive Stargardt Disease (ABCA4), and USH2A-related IRDs. The Company expects to select a lead construct for its LCA10 minigene program and obtain additional results for its Stargardt Disease minigene program by the end of 2020. The Company expects to obtain preliminary results from its USH2A minigene program in late 2020 or early 2021.

Corporate Update
In April 2020, the Company appointed Pravin U. Dugel, MD as Executive Vice President and Chief Strategy and Business Officer. In July 2020, Mark S. Blumenkranz, MD, MMS, joined its board of directors.

Second Quarter 2020 Operational Update and Cash Guidance
As of June 30, 2020, the Company had $245.7 million in cash and cash equivalents. In June 2020, the Company raised approximately $150 million in net proceeds in an underwritten public offering of common stock, and pre-funded warrants in lieu of common stock, and a concurrent private placement of common stock. The Company now estimates that its year-end 2020 cash and cash equivalents will range between $215 million and $220 million. The Company also estimates that its cash and cash equivalents will be sufficient to fund its currently planned capital expenditure requirements and operating expenses, excluding any potential approval or sales milestones payable to Archemix Corp. or any commercialization expenses for Zimura, through at least mid-2024. These estimates are based on the Company’s current business plan, which includes the continuation of the Company’s clinical development programs for Zimura, the progression of the Company’s IC-100 and IC-200 programs into the clinic, and the advancement of the Company’s IC-500 development program. These estimates assume that the Company will enroll approximately 400 patients in the GATHER2 trial. These estimates do not reflect any additional expenditures resulting from the potential in-licensing or acquisition of additional product candidates or technologies, commencement of any new sponsored research programs, or any associated develop that the Company may pursue.

2020 Q2 Financial Highlights

•R&D Expenses: Research and development expenses were $12.7 million for the quarter ended June 30, 2020, compared to $10.0 million for the same period in 2019. For the six months ended June 30, 2020, research and development expenses were $26.5 million compared to $17.7 million for the same period in 2019. Research and development expenses increased primarily due to increased manufacturing and preclinical development costs associated with the Company’s IC-100 and IC-200 gene therapy programs, the initiation and start-up activities for its GATHER2 clinical trial, manufacturing activities for Zimura and the progression of its HtrA1 inhibitor program.

•G&A Expenses: General and administrative expenses were $6.3 million for the quarter ended June 30, 2020, compared to $5.2 million for the same period in 2019. For the six months ended June 30, 2020, general and administrative expenses were $11.3 million compared to $10.7 million for the same period in 2019. General and administration expenses increased primarily due to increases in professional fees and general consulting costs.

•Income Tax (Benefit): Income tax benefits of $0.4 million and $3.7 million for the three and six months ended June 30, 2020, respectively, were recognized to reflect a favorable settlement of a state corporate income tax audit.

•Net Income: The Company reported a net loss for the quarter ended June 30, 2020 of $18.6 million, or ($0.32) per diluted share, compared to a net loss of $14.4 million, or ($0.35) per diluted share, for the same period in 2019. For the six months ended June 30, 2020, the Company reported a net loss of $33.7 million or ($0.61) per diluted share, compared to a net loss of $26.9 million or ($0.65) for the same period in 2019.

Conference Call/Web Cast Information
IVERIC bio will host a conference call/webcast to discuss the Company’s financial and operating results and provide a business update. The call is scheduled for August 5, 2020 at 8:00 a.m. Eastern Time. To participate in this conference call, dial 888-220-8451 (USA) or 323-794-2588 (International), passcode 2738321. A live, listen-only audio webcast of the conference call can be accessed on the Investors section of the IVERIC bio website at www.ivericbio.com. A replay will be available approximately two hours following the live call for two weeks. The replay number is 888-203-1112 (USA), passcode 2738321.

On August 5, 2020 Horizon Therapeutics plc (Nasdaq: HZNP) reported record second-quarter 2020 financial results (Press release, Horizon Pharma, AUG 5, 2020, View Source [SID1234562871]). The Company increased its full-year 2020 net sales and adjusted EBITDA guidance on continued strength of TEPEZZA. In addition to increasing TEPEZZA full-year 2020 net sales guidance, the Company also increased its peak U.S. annual net sales estimate for the medicine.

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"Driving our record second-quarter performance was the continued tremendous patient and physician response to TEPEZZA, along with our outstanding commercial execution, making the TEPEZZA launch one of the most successful rare disease medicine launches ever, despite a challenging COVID-19 environment," said Tim Walbert, chairman, president and chief executive officer, Horizon. "With TEPEZZA results having once again dramatically exceeded expectations, we increased both our TEPEZZA and Company full-year net sales guidance, as well as increased our TEPEZZA peak U.S. annual net sales estimate. We also continued to advance our clinical programs and improve our capital structure during the quarter. With our strong track record of strategic execution and driving value for patients and shareholders alike, Horizon is well positioned for long-term growth and success."

Second-Quarter and Recent Company Highlights

Strong Commercial Launch Drives Increase of TEPEZZA Peak U.S. Annual Net Sales Estimate: Today, the Company increased its peak U.S. annual net sales estimate for TEPEZZA to greater than $3 billion from the previous estimate of greater than $1 billion, as well as increased full-year 2020 net sales guidance to greater than $650 million from greater than $200 million. Several factors have contributed to the increased expectations, including the severity of TED, which is a motivating factor for patients seeking treatment; the Company’s market education efforts to increase awareness of TED, develop the market and assist with patient access; and a high volume of patient and physician interest driven by the Company’s commercial execution.

Announced Topline Data from TEPEZZA OPTIC-X Open-Label Extension Trial and OPTIC 48-Week Off-Treatment Follow-Up Period: In July 2020, the Company announced new topline results from its OPTIC-X open-label clinical trial, an extension trial of OPTIC, the TEPEZZA Phase 3 pivotal confirmatory clinical trial, as well as data from the OPTIC 48-week off-treatment follow-up period. OPTIC-X results demonstrate that 89 percent of patients who received placebo during OPTIC and then entered OPTIC-X and received TEPEZZA achieved the primary endpoint of 2 mm or more reduction in proptosis at Week 24. These patients had TED diagnosis for an average of one year compared with an average of six months in OPTIC. The results of the OPTIC 48-week off-treatment follow-up period demonstrated that the majority of TEPEZZA patients who were proptosis responders at Week 24 of OPTIC maintained their response at Week 72, nearly a year off treatment. For the small number of TEPEZZA patients who relapsed during the OPTIC follow-up period, the majority experienced improvements in proptosis with an additional course of TEPEZZA in OPTIC-X.

Reached Target Enrollment for KRYSTEXXA MIRROR RCT: In July 2020, the Company announced that the MIRROR RCT, the first randomized trial to evaluate the efficacy and safety of the concomitant use of KRYSTEXXA with methotrexate to increase the duration of response of KRYSTEXXA, reached its target enrollment of 135 patients. Preliminary results are expected in the first half of 2021.

New KRYSTEXXA Immunomodulation Data Presented: A series of data on KRYSTEXXA co-prescribed with commonly used immunomodulators, including methotrexate, leflunomide, mycophenolate mofetil and azathioprine, were presented virtually at the 2020 European League Against Rheumatism (EULAR) congress in June. The presentations showed response rates for KRYSTEXXA with immunomodulators ranging between 70 and 100 percent. The response rate of the KRYSTEXXA Phase 3 trials was 42 percent. The presentations added to the growing body of evidence supporting the immunomodulation treatment approach.

Expanded the Company’s Pipeline with Acquisition of Development-Stage Candidate HZN-825: On April 1, 2020, the Company completed the acquisition of Curzion Pharmaceuticals, Inc. and its lysophosphatidic acid 1 receptor (LPAR1) antagonist candidate (renamed HZN-825) for the treatment of diffuse cutaneous systemic sclerosis (dcSSc).

Permanent J-Code Issued for TEPEZZA: In July 2020, the Company announced that the U.S. Centers for Medicare and Medicaid Services (CMS) assigned a permanent, product-specific Healthcare Common Procedure Coding System (HCPCS) J-code (J3241) for TEPEZZA. The permanent J-code, which enables reimbursement in all outpatient treatment settings, is expected to go into effect on Oct. 1, 2020.

Acquired Certain Rights to Proceeds from Future Milestones and Royalties Related to TEPEZZA: In April 2020, in two separate transactions, the Company acquired the rights to proceeds from certain contingent future milestones and royalties related to TEPEZZA net sales in exchange for an aggregate payment of $110 million. These transactions relate to the rights to approximately 71 percent of the $225 million in milestone payments due upon achievement of certain TEPEZZA annual worldwide net sales thresholds and approximately 71 percent of the 3 percent royalty tied to the portion of TEPEZZA annual worldwide net sales exceeding $300 million.

Further Improved the Company’s Capital Structure: On Aug. 3, 2020, the Company completed the extinguishment of all $400 million of its 2.50 percent exchangeable senior notes due 2022. Since the beginning of 2019, the Company has reduced its gross debt by approximately $1 billion, while maintaining a strong cash balance. In part as a result of the extinguishment, S&P revised its outlook on the Company to positive from stable.

Announced Expanded Commercial Leadership Structure: As Horizon continues to grow at a rapid pace, it is expanding its leadership structure to separate the geographic oversight of its commercial operations to prepare for long-term global expansion. Vikram Karnani will now oversee international operations as executive vice president and president, International and Daniel A. Camardo will now oversee U.S. operations as executive vice president and president, U.S.

Received Best Workplace Awards: In April 2020, Great Place to Work and Fortune selected Horizon as one of the 2020 "Best Workplaces in Health Care and Biopharma" for the third consecutive year and Great Place to Work also named Horizon as the No. 1 "Best Workplace in Chicago" in the small and medium category.

Key Research and Development Programs

HZN-825 dcSSc Program: HZN-825 is the Company’s LPAR1 antagonist in development for the treatment of dcSSc, a rare, chronic autoimmune disease marked by fibrosis, or skin thickening, with no FDA-approved treatment options. The Company expects to begin a Phase 2b pivotal trial in the first half of 2021.

TEPEZZA Trial in Chronic (Inactive) TED: The Company expects to initiate a trial of TEPEZZA in patients with chronic TED (previously referred to as inactive TED) by year-end 2020. In chronic TED, the disease is no longer progressive; however, significant disease manifestations such as proptosis (eye bulging) and diplopia (double vision) remain.

Potential TEPEZZA Subcutaneous Administration Program: The Company is planning to initiate a pharmacokinetic trial later this year to explore subcutaneous dosing of TEPEZZA, which is currently administered by infusion. The objective of the trial is to inform the potential for additional administration options for TEPEZZA, which could provide greater flexibility for patients and physicians.

TEPEZZA dcSSc Exploratory Trial: As part of its evaluation of additional indications for TEPEZZA, the Company is planning to initiate an exploratory trial in dcSSc by the end of 2020.

KRYSTEXXA MIRROR RCT: The Company is currently evaluating the efficacy and safety of the concomitant use of KRYSTEXXA with methotrexate to increase the complete response rate of KRYSTEXXA in the MIRROR placebo-controlled RCT. In July 2020, MIRROR RCT reached its target enrollment of 135 patients, and additional patients in screening will also randomize if eligible. The registrational trial is designed to enable the potential submission of results to the FDA to update the prescribing information. The MIRROR RCT follows the MIRROR open-label trial completed in 2019 that demonstrated a 79 percent complete response rate for patients using KRYSTEXXA with methotrexate, nearly double the 42 percent response rate in the KRYSTEXXA Phase 3 clinical program, which evaluated KRYSTEXXA alone. Methotrexate is the immunomodulator most used by rheumatologists and has been shown to reduce anti-drug antibody formation to biologic therapies when used in conjunction with these therapies.

KRYSTEXXA PROTECT Trial in Kidney Transplant Patients with Uncontrolled Gout: The Company has achieved more than 50 percent enrollment in its PROTECT open-label clinical trial, and expects to complete enrollment by the end of 2020. The trial is evaluating the effect of KRYSTEXXA on serum uric acid levels in kidney transplant patients with uncontrolled gout. Kidney transplant patients have more than a tenfold increase in the prevalence of gout when compared to the general population, and literature suggests that persistently high serum uric acid levels can be associated with organ rejection. Managing uncontrolled gout is one of the most common and significant unmet needs of kidney transplant patients.

KRYSTEXXA Shorter-Infusion Duration Trial: The Company expects to initiate an open-label trial by the end of 2020 to evaluate the impact of administering KRYSTEXXA over a significantly shorter infusion duration. Currently, KRYSTEXXA is infused over a two-hour or longer timeframe. A shorter infusion duration could meaningfully improve the experience and convenience for patients, physicians and sites of care.

Second-Quarter Financial Results

Note: For additional detail and reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures, please refer to the tables at the end of this release.

Net Sales: Second-quarter 2020 net sales were $462.8 million, an increase of 44 percent.

Gross Profit: Under U.S. GAAP, the second-quarter 2020 gross profit ratio was 73.7 percent compared to 72.2 percent in the second quarter of 2019. The non-GAAP gross profit ratio in the second quarter of 2020 was 88.4 percent compared to 90.9 percent in the second quarter of 2019.

Operating Expenses: Research and development (R&D) expenses were 17.5 percent of net sales and selling, general and administrative (SG&A) expenses were 48.0 percent of net sales. Non-GAAP R&D expenses were 6.1 percent of net sales, and non-GAAP SG&A expenses were 41.4 percent of net sales.

Income Tax Expense: In the second quarter of 2020, income tax expense on a GAAP and non-GAAP basis was $83.0 million and $93.6 million, respectively.

Net (Loss) Income: On a GAAP basis in the second quarter of 2020, net loss was $80.0 million. Second-quarter 2020 non-GAAP net income was $83.8 million.

Adjusted EBITDA: Second-quarter 2020 adjusted EBITDA was $190.7 million.

(Loss) Earnings per Share: On a GAAP basis diluted loss per share in the second quarter of 2020 and 2019 was $0.42 and $0.03, respectively. Non-GAAP diluted earnings per share in the second quarter of 2020 and 2019 was $0.40 and $0.49, respectively. Weighted average shares outstanding used for calculating GAAP and non-GAAP diluted earnings per share in the second quarter of 2020 were 192.7 million and 214.5 million, respectively.

Second-Quarter Segment Results

Management uses net sales and segment operating income to evaluate the performance of the Company’s two segments, the orphan segment and the inflammation segment. While segment operating income contains certain adjustments to the directly comparable GAAP figures in the Company’s consolidated financial results, it is considered to be prepared in accordance with GAAP for purposes of presenting the Company’s segment operating results.

On August 5, 2020 EyePoint Pharmaceuticals, Inc. (NASDAQ: EYPT), a pharmaceutical company committed to developing and commercializing innovative ophthalmic products, reported financial results for the second quarter ended June 30, 2020 and highlighted recent corporate developments (Press release, pSivida, AUG 5, 2020, View Source [SID1234562870]).

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"We were encouraged by the re-opening of healthcare facilities in select regions of the U.S during the quarter-end as underlying customer demand from our distributors was strong in June for both YUTIQ and DEXYCU. We believe the distinct advantages of single-injection, long-lasting activity provides for fewer office visits and less contact with patient eyes and positions both products for expanded use during the COVID-19 pandemic and recovery," said Nancy Lurker, President and Chief Executive Officer of EyePoint Pharmaceuticals. "We are also very excited to announce our new U.S. commercial alliance with ImprimisRx for DEXYCU and believe that this collaboration will significantly enhance the DEXYCU opportunity by reaching new physicians and ambulatory surgery centers, while also pairing DEXYCU with Harrow’s complementary ophthalmology drug offerings. In addition to increased physician reach, this agreement keeps our commercial cost structure at our previously announced reduced levels. As we continue to further build our commercial efforts and product education initiatives, we remain very focused on our balance sheet and continue to actively manage our spending burn rate as we look to extend our cash runway into 2021."

Ms. Lurker continued, "Our new Chief Strategic Scientific Officer, Dr. Jay Duker, will lead our development efforts for EYP-1901, a potential six-month sustained delivery anti-VEGF therapy using our bioerodible Durasert technology. The good laboratory practice (GLP) toxicology study for this program is progressing well and we expect data in the coming months to support filing of

an Investigational New Drug (IND) application in the fourth quarter. We are very excited to advance this program to potentially treat wet age-related macular degeneration (wet AMD), a significant market in need of innovative, long-lasting therapies."

Commercial Performance in Second Quarter 2020

During the quarter, public health authorities and government agencies, including the Centers for Medicare & Medicaid Services (CMS), issued recommendations for the re-opening of health care systems and the resumption of non-essential elective surgeries, including cataract surgery, in areas with low or stable incidence of COVID-19.

As a result, office visits for uveitis and retinal specialists increased and ambulatory surgery centers (ASCs) resumed operations and scheduling of surgeries in select U.S. regions on a limited basis.

Customer demand for YUTIQ, represented as units purchased by physicians from the Company’s distributors, was 428 units in Q2 as compared to 537 units in Q1. June represented 167 units of that demand.

Customer demand for DEXYCU, represented as units purchased by ASCs from the Company’s distributors, was 2,096 units in Q2 as compared to 3,462 units in Q1. June represented one of the highest customer demand months of 2020 for DEXYCU, with 1,592 units, despite reductions in our commercial organization that were announced on April 1.

The Company continues to actively monitor the COVID-19 pandemic and associated public health recommendations to ensure the safety of our patients and physicians as regions of the U.S. begin to reopen.

Operations Update

In August, the Company announced a U.S. commercial alliance with ImprimisRx, the nation’s leading ophthalmic-focused outsourcing facility, for DEXYCU, in which it will be marketed as prioritized product. Under the terms of the commercial alliance, ImprimisRx will deploy its sales team to immediately begin promoting DEXYCU to its accounts with an initial focus on accounts currently purchasing Tri-Moxi for ocular surgery inflammation. EyePoint will be responsible for the marketing, selling, pricing, manufacturing, and contracting for DEXYCU while also seeking additional volume-based agreements with ASCs and integrated health care networks to expand patient access. ImprimisRx will be entitled to receive a commission on the incremental sales that exceed pre-specified baselines.

In July, Jay S. Duker, M.D, was appointed to the newly created role of Chief Strategic Scientific Officer. Dr. Duker will lead the strategic advancement of research and development efforts, beginning with our lead development candidate, EYP-1901, for wet AMD and new pipeline expansion opportunities under evaluation. Dr. Duker is world renowned retinal disease expert and serves as the Director of the New England Eye Center. and Professor and Chair of Ophthalmology at Tufts Medical Center and Tufts University School of Medicine.

R&D Highlights

In July, data from the first Phase 3 trial of YUTIQ were presented at the American Society of Retina Specialists Virtual Annual Meeting. A post-hoc analysis of imputed recurrences revealed over half were from confounding systemic medication use, which suggest the recurrence rate for YUTIQ is likely lower than the reported 56% at 36-months. The results

also demonstrated YUTIQ increased the resolution of macular edema and improved visual acuity at 36-months.

In June, supportive data from the Phase 2 trial of orally delivered vorolanib, the anri-VEGF molecule in EYP-1901, conducted by Tyrogenex, Inc. for the treatment of wet AMD were published in the British Journal of Ophthalmology. Oral voloranib demonstrated non-inferiority in visual acuity compared to placebo with best corrected visual acuity (BCVA) stable through 12-months. The three oral vorolanib doses levels studied also demonstrated a decreased intravitreal anti-VEGF injection burden and a longer time to first treatment as compared to placebo. There were several instances in which patients on voloranoib did not require another anti-VEGF injection after screening. The trial was prematurely stopped due to gastrointestinal and hepatobiliary toxicity concerns. The efficacy results provide additional validation of vorolanib for use in EYP-1901 as a potential single dose sustained release treatment for wet AMD.

In June, a post-hoc analysis of cases of bilateral uveitis in the first Phase 3 trial of YUTIQ were presented virtually at the Association for Research in Vision and Ophthalmology Annual Meeting. Outcomes for the untreated fellow eye were examined as a means of understanding the natural history of the disease and showed a recurrence rate of 86.4% compared to 56.3% for YUTIQ treated eyes at 36-months. At 36-months, fellow eyes also showed a higher rate of the need for the assistance of adjunctive intraocular/periocular injection medication for uveitic inflammation, more macular edema, and a one-line average decrease in BCVA. These supportive results reinforce the long-term, anti-inflammatory activity of YUTIQ for this difficult to treat disease.

In May, four abstracts highlighting data from the ongoing retrospective study of real-world use of DEXYCU were presented at the American Society of Cataract and Refractive Surgery 2020 Virtual Annual Meeting. The data showed DEXYCU’s early-acting anti-inflammatory activity resulted in complete anterior chamber cell clearing (cell score=0), a measurement of inflammation, in 51.2%, 60.9%, 86.2% and 90.5% at postoperative day 1, 8, 14 and 30, respectively. The proportion of patients with no anterior chamber flares (flare score=0), another measurement of inflammation, was 85.9%, 97.1%, 99.1% and 99.1% at postoperative day 1, 8, 14 and 30, respectively. DEXYCU also received high marks on the physician survey of product satisfaction, ease of use, efficacy compared to topic steroids and patient satisfaction.

Review of Second Quarter Results Ended June 30, 2020

For the three months ended June 30, 2020, total net revenue was $4.1 million compared to $7.2 million for the three months ended June 30, 2019. Net product revenue for the three months ended June 30, 2020 was $3.7 million, with $2.9 million for YUTIQ and $0.8 million for DEXYCU, compared to net product revenue for three months ended June 30, 2019 of $6.7 million generated by YUTIQ. Net product revenue represents product purchased by EyePoint’s distributors whereas customer demand represents purchases of product by physician practices and ambulatory surgery centers from EyePoint’s distributors.

Net revenue from royalties and collaborations for the three months ended June 30, 2020 totaled $416,000 compared to $505,000 in the corresponding quarter in 2019.

Operating expenses for the three months ended June 30, 2020 decreased to $15.3 million from $17.4 million in the prior year period, due primarily to decreased sales and marketing costs from our previously announced restructuring as well as lower research and development costs. Non-

operating expense, net, for the three months ended June 30, 2020 totaled $1.8 million of net interest expense. Net loss for the three months ended June 30, 2020 was $13.0 million, or $0.10 per share, compared to a net loss of $11.5 million, or $0.11 per share, for the prior year quarter.

Review of Six Months Results Ended June 30, 2020

For the six months ended June 30, 2020, total revenue was $11.6 million compared to $9.2 million for the six months ended June 30, 2019. Net product revenue for the six months ended June 30, 2020 was $8.4 million, compared to net product revenue for six months ended June 30, 2019 of $7.9 million.

Net revenue from royalties and collaborations for the six months ended June 30, 2020 totaled $3.2 million compared to $1.3 million in the corresponding quarter in 2019.

Operating expenses for the six months ended June 30, 2020 totaled $34.2 million from $34.0 million in the prior year period. This increase was primarily from higher cost of sales due to higher product sales as well as an increased royalty expense stemming from a $2 million upfront payment received during Q1-2020 for the licensing of DEXYCU in China.

Non-operating expense, net, for the six months ended June 30, 2020 totaled $3.5 million. Net loss for the six months ended June 30, 2020 was $26.1 million, or $0.22 per share, compared to a net loss of $30.7 million, or $0.30 per share, for the prior year period.

Cash and cash equivalents at June 30, 2020 totaled $22.8 million compared to $22.2 million at December 31, 2019.

Financial Outlook

We expect that the Company’s cash and cash equivalents combined with projected cash inflows from anticipated YUTIQ and DEXYCU product sales and other expected financing activities can fund the Company’s operating plan into 2021 under current assumptions for the duration of the COVID-19-related closures across the U.S.

The Company continues to assess additional cash conservation and generation measures to support its operations through the COVID-19 pandemic.

Conference Call Information

EyePoint will host a conference call today, Wednesday, August 5, 2020, at 8:30 AM ET to discuss the results for the first quarter ended March 31 and recent operational developments. To access the conference call, please dial (877) 312-7507 from the U.S. and Canada or (631) 813-4828 (international) at least 10 minutes prior to the start time and refer to conference ID 5815799. A live webcast will be available on the Investor Relations section of the corporate website at View Source A replay of the webcast will also be available on the corporate website.

On August 5, 2020 Teva Pharmaceutical Industries Ltd. (NYSE: TEVA, TASE: TEVA) reported results for the quarter ended June 30, 2020 (Press release, Teva, AUG 5, 2020, View Source [SID1234562869]).

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Mr. Kåre Schultz, Teva’s President and CEO, said, "As the COVID-19 pandemic continues to impact the globe, Teva remains focused on our patients and communities while continuing to take robust measures to safeguard the health and well-being of our employees. During the quarter, we experienced lower sales of our generic and OTC products in all regions. The lower generics and OTC sales in Europe and International Markets were in line with our expectations, after the unusually high demand seen in the prior quarter due to the initial response to the pandemic. Our performance in the first half of the year, however, matched or exceeded that of the similar period last year. Our profitability – and in particular our free cash flow – were strong, allowing us to continue to reduce our net debt to $23.9 billion and to reaffirm our 2020 outlook."

Mr. Schultz continued, "During the quarter we made progress with many of our growth drivers, including the launch of the AJOVY auto-injector in the U.S., the continued launch of AJOVY in the EU, the launch of the biosimilar TRUXIMA for rheumatoid arthritis in the U.S. and approval of AUSTEDO in China. Additionally, we recently announced the launch of ProAir DigiHaler in the U.S. and the submission of an application for manufacturing and marketing approval of AJOVY in Japan. As we look forward to the second half of 2020, we remain fully committed to serving society and our stakeholders with critical and accessible medicines and to ensuring Teva meet its targets."

Phase 3 fasinumab results announced with Regeneron

In September 2016, Teva and Regeneron Pharmaceuticals, Inc. ("Regeneron") entered into a collaborative agreement to develop and commercialize Regeneron’s pain medication product, fasinumab. Results for two phase 3 clinical trials, FACT OA1 and FACT OA2, were released on August 5, 2020, indicating that the co-primary endpoints for fasinumab were achieved. Fasinumab 1 mg monthly demonstrated significant improvements in pain and physical function over placebo at week 16 and week 24, respectively. Fasinumab 1 mg monthly also showed nominally significant benefits in physical function in two trials and pain in one trial, when compared to the maximum FDA-approved prescription doses of non-steroidal anti-inflammatory drugs for osteoarthritis. The FACT OA1 trial included an additional treatment arm, fasinumab 1 mg every two months, which showed numerical benefit over placebo, but did not reach statistical significance. In initial safety analyses from the phase 3 trials, there was an increase in arthropathies reported with fasinumab. In a sub-group of patients from one phase 3 long-term safety trial, there was an increase in joint replacement with fasinumab 1 mg monthly treatment during the off-drug follow-up period, although this increase was not seen in the other trials to date. Additional longer-term safety data from the ongoing trials are being collected, and are expected to be reported early next year.

Second Quarter 2020 Consolidated Results

Revenues in the second quarter of 2020 were $3,870 million, a decrease of 7%, or 5% in local currency terms, compared to the second quarter of 2019. This decrease was mainly due to lower revenues from generics, OTC and COPAXONE in all regions and lower revenues from QVAR and BENDEKA/TREANDA in our North America segment, as well as reduced demand for certain products resulting from the impact the COVID-19 pandemic had on purchasing patterns, partially offset by higher revenues from AUSTEDO, Anda and AJOVY in the U.S.

Exchange rate differences between the second quarter of 2020 and the second quarter of 2019, net of hedging, negatively impacted our revenues by $79 million and negatively impacted our GAAP and non-GAAP operating income by $35 million and $37 million, respectively.

GAAP gross profit was $1,763 million in the second quarter of 2020, a decrease of 7% compared to the second quarter of 2019. GAAP gross profit margin was 45.5% in the second quarter of 2020, compared to 45.3% in the second quarter of 2019. Non-GAAP gross profit was $2,011 million in the second quarter of 2020, a decrease of 8% compared to the second quarter of 2019. Non-GAAP gross profit margin was 52.0% in the second quarter of 2020, compared to 52.4% in the second quarter of 2019. The decrease in gross profit margin was mainly due to lower profitability in Europe resulting from price decreases in our specialty products and lower profitability in International Markets primarily resulting from lower sales in Japan and the impact the COVID-19 pandemic had on purchasing patterns, as well as lower sales of COPAXONE and other specialty products, partially offset by higher profitability in North America resulting from the change in mix of products.

GAAP Research and Development (R&D) expenses in the second quarter of 2020 were $225 million, a decrease of 19% compared to the second quarter of 2019. Non-GAAP R&D expenses were $233 million, or 6.0% of quarterly revenues, in the second quarter of 2020, compared to $271 million, or 6.5%, in the second quarter of 2019. The decrease in R&D expenses resulted primarily from the life cycle and stage of various projects, as well as an impact related to the COVID-19 pandemic.

GAAP Selling and Marketing (S&M) expenses in the second quarter of 2020 were $597 million, a decrease of 10% compared to the second quarter of 2019. Non-GAAP S&M expenses were $559 million, or 14.4% of quarterly revenues, in the second quarter of 2020, compared to $621 million, or 14.9%, in the second quarter of 2019. The decrease was mainly due to cost reductions and efficiency measures, as well as lower marketing and travel costs attributed to restrictions related to the COVID-19 pandemic.

GAAP General and Administrative (G&A) expenses in the second quarter of 2020 were $264 million, a decrease of 11% compared to the second quarter of 2019. Non-GAAP G&A expenses were $245 million, or 6.3% of quarterly revenues, in the second quarter of 2020, compared to $286 million, or 6.8%, in the second quarter of 2019.

GAAP other income in the second quarter of 2020 was $9 million, flat compared to the second quarter of 2019. Non-GAAP other income in the second quarter of 2020 was $6 million. We did not have any non-GAAP other income in the second quarter of 2019.

GAAP operating income in the second quarter of 2020 was $173 million, compared to GAAP operating loss of $644 million in the second quarter of 2019. Non-GAAP operating income in the second quarter of 2020 was $979 million, a decrease of 3%, compared to $1,011 million in the second quarter of 2019. The increase in GAAP operating income was mainly due to higher legal settlements and loss contingencies charges in the second quarter of 2019 and lower intangible asset impairments charges in the second quarter of 2020, as well as the changes discussed above, partially offset by higher other assets impairments, restructuring and other items in the second quarter of 2020.

EBITDA (non-GAAP operating income, which excludes amortization and certain other items, as well as depreciation expenses) was $1,108 million in the second quarter of 2020, a decrease of 3% compared to $1,144 million in the second quarter of 2019.

GAAP financial expenses were $223 million in the second quarter of 2020, compared to $206 million in the second quarter of 2019. Non-GAAP financial expenses were $229 million in the second quarter of 2020, compared to $198 million in the second quarter of 2019.

In the second quarter of 2020, we recognized a GAAP tax benefit of $104 million, on pre-tax loss of $51 million. In the second quarter of 2019, we recognized a tax benefit of $179 million, on pre-tax loss of $850 million. Our tax rate for the second quarter of 2020 was mainly affected by impairments in jurisdictions in which tax rates are higher than Teva’s average tax rate on its ongoing business operations and other changes to tax positions and deductions. Non-GAAP income taxes for the second quarter of 2020 were $128 million, or 17%, on pre-tax non-GAAP income of $751 million. Non-GAAP income taxes in the second quarter of 2019 were $134 million, or 16%, on pre-tax non-GAAP income of $812 million. Our non-GAAP tax rate for the second quarter of 2020 was mainly affected by the mix of products sold and other changes to tax positions and deductions.

We expect our annual non-GAAP tax rate for 2020 to be 17-18%, unchanged from our outlook provided in February 2020.

GAAP net income attributable to Teva and GAAP diluted EPS were $140 million and $0.13 respectively, in the second quarter of 2020, compared to GAAP net loss and GAAP diluted loss per share of $689 million and $0.63 in the second quarter of 2019. Non-GAAP net income attributable to Teva and non-GAAP diluted EPS in the second quarter of 2020 were $605 million and $0.55, respectively, compared to $653 million and $0.60 in the second quarter of 2019. The decrease in non-GAAP net income and non-GAAP diluted EPS is mainly due to lower gross profit, partially offset by lower operating expenses.

The weighted average diluted shares outstanding used for the fully diluted share calculation for the three months ended June 30, 2020 and 2019 were 1,100 million and 1,092 million shares, respectively. The weighted average outstanding shares for the fully diluted EPS calculation on a non-GAAP basis for the three months ended June 30, 2020 and 2019 were 1,100 million and 1,093 million shares, respectively.

As of June 30, 2020 and 2019, the fully diluted share count for purposes of calculating our market capitalization was approximately 1,119 million and 1,107 million, respectively.

Non-GAAP information: Net non-GAAP adjustments in the second quarter of 2020 were $465 million. Non-GAAP net income and non-GAAP EPS for the second quarter of 2020 were adjusted to exclude the following items:

Impairment of long-lived assets of $396 million, mainly comprised of $261 million related to an agreement to sell certain assets from Teva’s business venture in Japan and $108 million impairment of intangible assets of product rights and IPR&D assets related to the Actavis Generics acquisition;
Amortization of purchased intangible assets of $249 million, of which $219 million is included in cost of sales and the remaining $30 million in S&M expenses;
Contingent consideration expenses of $76 million, mainly related to bendamustine;
Restructuring expenses of $33 million;
Equity compensation expenses of $30 million;
Other items of $4 million;
Legal settlements and loss contingencies of $13 million;
Minority income of $105 million; and
Income tax of $231 million.
Teva believes that excluding such items facilitates investors’ understanding of its business. For further information, see the tables below for a reconciliation of the U.S. GAAP results to the adjusted non-GAAP figures and the information under "Non-GAAP Financial Measures." Investors should consider non-GAAP financial measures in addition to, and not as replacement for, or superior to, measures of financial performance prepared in accordance with GAAP.

Cash flow generated from operating activities during the second quarter of 2020 was $273 million, compared to cash flow used in operating activities of $227 million in the second quarter of 2019. The increase in the second quarter of 2020 was mainly due to favorable collection of payments from customers in the second quarter of 2020, resulting from increased sales in the first quarter.

Free cash flow (cash flow generated from operating activities, net of cash received for capital investments and beneficial interest collected in exchange for securitized trade receivables) was $582 million in the second quarter of 2020, compared to $168 million in the second quarter of 2019. The increase in the second quarter of 2020 resulted mainly from higher cash flow generated from operating activities.

As of June 30, 2020, our debt was $26,266 million, compared to $26,103 million as of March 31, 2020. This increase was mainly due to exchange rate fluctuations. The portion of total debt classified as short-term as of June 30, 2020 was 6%, similar to March 31, 2020. Our average debt maturity was approximately 6.1 years as of June 30, 2020 compared to 6.6 years as of March 31, 2020. In July 2020, we repaid at maturity debt of €1,010 million.

Segment Results for the Second Quarter of 2020

North America Segment

Our North America segment includes the United States and Canada.

Segment profit does not include amortization and certain other items.

§ Represents an amount less than 0.5%.

Revenues from our North America segment in the second quarter of 2020 were $2,047 million, a decrease of $24 million, or 1%, compared to the second quarter of 2019, mainly due to a decrease in revenues of COPAXONE, generics products and BENDEKA/TREANDA, partially offset by higher revenues from AUSTEDO, Anda and AJOVY.

Revenues in the United States, our largest market, were $1,928 million in the second quarter of 2020, flat compared to the second quarter of 2019.

Revenues by Major Products and Activities

Generic products revenues in our North America segment (including biosimilars) in the second quarter of 2020 were $923 million, a decrease of 2% compared to the second quarter of 2019. This decrease was mainly due to lower volume and lower royalty income, offset by an increase in revenues from TRUXIMA and from our ProAir authorized generic due to higher demand related to the COVID-19 pandemic.

In the second quarter of 2020, we led the U.S. generics market in total prescriptions and new prescriptions, with approximately 376 million total prescriptions (based on trailing twelve months), representing 10.2% of total U.S. generic prescriptions according to IQVIA data.

AJOVY revenues in our North America segment in the second quarter of 2020 were $34 million, an increase of $11 million, or 50% compared to the second quarter of 2019, mainly due to growth in volume in the second quarter of 2020 and the introduction of the auto-injector device. AJOVY was approved by the FDA and launched in the United States in September 2018 for the preventive treatment of migraine in adults. On January 27, 2020, the FDA approved an auto-injector device for AJOVY in the U.S., which became commercially available in April 2020. In addition, AJOVY was approved in Canada on April 14, 2020.

AUSTEDO revenues in our North America segment in the second quarter of 2020 increased by 67% to $161 million, compared to $96 million in the second quarter of 2019. This increase was mainly due to growth in volume in the second quarter of 2020.

BENDEKA and TREANDA combined revenues in our North America segment in the second quarter of 2020 decreased by 18% to $103 million, compared to the second quarter of 2019, mainly due to the emergence of alternative novel therapies and continued competition from Belrapzo (a ready-to-dilute bendamustine hydrochloride product from Eagle Pharmaceuticals, Inc.).

COPAXONE revenues in our North America segment in the second quarter of 2020 decreased by 13% to $238 million, compared to the second quarter of 2019, mainly due to generic competition in the United States.

ProAir revenues in our North America segment in the second quarter of 2020 were $66 million, flat compared to the second quarter of 2019. In January 2019, we launched our own ProAir authorized generic in the United States following the launch of a generic version of Ventolin HFA, another albuterol inhaler. Revenues from our ProAir HFA authorized generic are included in "generic products" above. ProAir is the fourth-largest short-acting beta-agonist in the market, with an exit market share of 11.0% in terms of total number of prescriptions for albuterol inhalers during the second quarter of 2020, compared to 23.9% in the second quarter of 2019. The exit market share including our ProAir HFA authorized generic is 33.4%, making our overall albuterol product the second largest in the market, compared to 44.4% in the second quarter of 2019.

In July 2020, we announced the launch of ProAir Digihaler (albuterol sulfate 117 mcg) inhalation powder, which is the first and only digital rescue inhaler with built-in sensors which connects to a companion mobile application and provides inhaler use information to people with asthma and COPD.

QVAR revenues in our North America segment in the second quarter of 2020 decreased by 15% to $51 million, compared to the second quarter of 2019, mainly due to increased price competition and lower volumes. QVAR maintained its second-place position in the inhaled corticosteroids category in the United States, with an exit market share of 19.8% in terms of total number of prescriptions during the second quarter of 2020, compared to 20.2% in the second quarter of 2019.

Anda revenues in our North America segment in the second quarter of 2020 increased by 7% to $374 million, compared to $351 million in the second quarter of 2019, mainly due to higher volume increases primarily related to the COVID-19 pandemic.

North America Gross Profit

Gross profit from our North America segment in the second quarter of 2020 was $1,090 million, an increase of 2%, compared to $1,067 million in the second quarter of 2019.

Gross profit margin for our North America segment in the second quarter of 2020 increased to 53.3%, compared to 51.5% in the second quarter of 2019. This increase was mainly due to the change in mix of products.

North America Profit

Profit from our North America segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.

Profit from our North America segment in the second quarter of 2020 was $573 million, an increase of 14%, compared to $504 million in the second quarter of 2019. This increase was due to a favorable mix of products, including AUSTEDO and AJOVY, and lower expenses.

Europe Segment

Our Europe segment includes the European Union and certain other European countries.

Revenues from our Europe segment in the second quarter of 2020 were $1,001 million, a decrease of 15%, or $182 million, compared to the second quarter of 2019. In local currency terms, revenues decreased by 13%, mainly due to reduced demand for certain products resulting from the impact the COVID-19 pandemic had on purchasing patterns. The COVID-19 pandemic led to increased demand in the first quarter and a correlating decrease in demand in the second quarter, and also led to a decline in doctor visits by patients resulting in fewer prescriptions during the second quarter of 2020. The decrease is also attributed to price declines for oncology products as a result of generic competition and a decline in COPAXONE revenues due to competing glatiramer acetate products, partially offset by new generic product launches.

Generic products revenues in our Europe segment in the second quarter of 2020, including OTC products, decreased by 13% to $737 million, compared to the second quarter of 2019. In local currency terms, revenues decreased by 10% compared to the second quarter of 2019, mainly due to reduced demand for certain products resulting from the impact the COVID-19 pandemic had on purchasing patterns. The COVID-19 pandemic led to increased demand in the first quarter and a correlating decrease in demand in the second quarter, and also led to a decline in doctor visits by patients resulting in fewer prescriptions during the second quarter of 2020, partially offset by new generic product launches.

COPAXONE revenues in our Europe segment in the second quarter of 2020 decreased by 21% to $84 million, compared to the second quarter of 2019. In local currency terms, revenues decreased by 19%, mainly due to price reductions and a decline in volume resulting from competing glatiramer acetate products and by reduced demand resulting from the impact the COVID-19 pandemic had on purchasing patterns. The COVID-19 pandemic led to increased demand in the first quarter and a correlating decrease in demand in the second quarter.

Respiratory products revenues in our Europe segment in the second quarter of 2020 decreased by 11% to $80 million, compared to the second quarter of 2019. In local currency terms, revenues decreased by 8%, mainly due to reduced demand resulting from the impact the COVID-19 pandemic had on purchasing patterns. The COVID-19 pandemic led to increased demand in the first quarter and a correlating decrease in demand in the second quarter.

AJOVY revenues in our Europe segment in the second quarter of 2020 were $5 million, compared to $1 million in the second quarter of 2019. AJOVY was granted a Marketing Authorization in the European Union by the European Medicines Agency ("EMA") in a centralized process in April 2019. We commenced launching AJOVY in certain European markets in May 2019 and are moving forward with plans to launch in other European countries. In October 2019, we received approval from the EMA for AJOVY’s auto-injector submission in the European Union and we commenced launch in March 2020.

Europe Gross Profit

Gross profit from our Europe segment in the second quarter of 2020 was $548 million, a decrease of 19% compared to $674 million in the second quarter of 2019. This decrease was mainly due to lower revenues, partially offset by new generic product launches, as discussed above.

Gross profit margin for our Europe segment in the second quarter of 2020 decreased to 54.7%, compared to 56.9% in the second quarter of 2019. This decrease was mainly due to price decreases in certain specialty products.

Europe Profit

Profit from our Europe segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.

Profit from our Europe segment in the second quarter of 2020 was $244 million, a decrease of 23%, compared to $316 million in the second quarter of 2019. This decrease was mainly due to lower revenues, partially offset by lower expenses.

International Markets Segment

Our International Markets segment includes all countries other than those in our North America and Europe segments. The key markets in this segment are Japan, Russia and Israel. On July 30, 2020, we entered into an agreement to sell the majority of the generic and operational assets of our business venture in Japan. We expect this transaction to close by early 2021.

Revenues from our International Markets segment in the second quarter of 2020 were $488 million, a decrease of $94 million, or 16%, compared to the second quarter of 2019. In local currency terms, revenues decreased 9% compared to the second quarter of 2019, mainly due to lower sales in Japan resulting from regulatory price reductions and generic competition to off-patented products and loss of revenues from the sale of certain assets in the Israeli market. Revenues in the second quarter of 2020 were also impacted by reduced demand for certain products resulting from the impact the COVID-19 pandemic had on purchasing patterns. The COVID-19 pandemic led to increased demand in the first quarter and a correlating decrease in demand in the second quarter. The revenues in the second quarter of 2020 included $16 million from a negative hedging impact, which are included in "Other" in the table below.

Revenues by Major Products and Activities

* The data presented for prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1c to our consolidated financial statements for additional information.

Generic products revenues in our International Markets segment in the second quarter of 2020, which include OTC products, decreased by 13% to $426 million, compared to the second quarter of 2019. In local currency terms, revenues decreased by 7%, mainly due to lower sales in Japan resulting from regulatory price reductions and generic competition to off-patented products. Revenues in the second quarter of 2020 were also impacted by reduced demand for certain products resulting from the impact the COVID-19 pandemic had on purchasing patterns. The COVID-19 pandemic led to increased demand in the first quarter and a correlating decrease in demand in the second quarter.

COPAXONE revenues in our International Markets segment in the second quarter of 2020 decreased by 13% to $12 million, compared to $13 million in the second quarter of 2019. In local currency terms, revenues decreased by 2%.

In May 2020, AUSTEDO was approved in China for the treatment of chorea associated with Huntington disease and for the treatment of tardive dyskinesia.

International Markets Gross Profit

Gross profit from our International Markets segment in the second quarter of 2020 was $247 million, a decrease of 21% compared to $312 million in the second quarter of 2019.

Gross profit margin for our International Markets segment in the second quarter of 2020 decreased to 50.8%, compared to 53.7% in the second quarter of 2019. This decrease was mainly due to lower sales, as discussed above.

International Markets Profit

Profit from our International Markets segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.

Profit from our International Markets segment in the second quarter of 2020 was $97 million, a decrease of 29%, compared to $136 million in the second quarter of 2019. This decrease was mainly due to lower revenues and a negative hedging impact, partially offset by lower expenses.

Other Activities

We have other sources of revenue, primarily the sale of APIs to third parties, certain contract manufacturing services and an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis. Our other activities are not included in our North America, Europe or International Markets segments described above.

Our revenues from other activities in the second quarter of 2020 were $335 million, a decrease of 2% compared to the second quarter of 2019. In local currency terms, revenues decreased by 1%.

API sales to third parties in the second quarter of 2020 were $211 million, an increase of 4% in both U.S. dollar and local currency terms, compared to the second quarter of 2019.

Conference Call

Teva will host a conference call and live webcast along with a slide presentation on August 5, 2020 at 8:00 a.m. ET to discuss its second quarter of 2020 results and overall business environment. A question & answer session will follow.

A live webcast of the call will also be available on Teva’s website at: ir.tevapharm.com. Please log in at least 10 minutes prior to the conference call in order to download the required software.

On August 5, 2020 Perrigo Company plc (NYSE; TASE: PRGO), a leading provider of Quality, Affordable Self-Care Products, reported financial results for the second quarter ended June 27, 2020 (Press release, Perrigo Company, AUG 5, 2020, View Source [SID1234562868]).

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President and CEO Murray S. Kessler commented, "Strong second quarter and first half results in the face of COVID-19 pandemic uncertainty demonstrates just how far Perrigo has come over the past 2 years in its consumer self-care transformation and reflects the countless contributions from our dedicated employees worldwide. The Perrigo team met the challenge in the second quarter and first half of elevated consumer demand related to the COVID-19 surge, while remarkably continuing to make meaningful progress on our consumer self-care transformation."

Kessler continued, "While uncertainty related to the pandemic remains, we believe we now have sufficient line of sight to reaffirm 2020 adjusted diluted EPS guidance. We base this on the fact that our team has been able to keep 27 world-wide manufacturing facilities, most of which are running 24-hours a day, 7 days a week, without missing a single shift due to COVID-19. Demand on products within our portfolio deemed essential remains strong, non-essential product categories are slowly but surely recovering from the impact of reduced store traffic and patient visits, our e-Commerce business more than doubled, wholesale and retail inventories have been mostly restored, and we believe we have a good estimate of the incremental COVID related costs on our operations."

Kessler concluded, "Even though it will likely be a while before the COVID-19 pandemic is behind us, Perrigo’s transformed business model, now based on Self-Care and Value combined with its passionate workforce, have the Company well-positioned for sustainable and profitable long-term growth."

Second Quarter Financial Highlights

Consolidated second quarter net sales were $1.2 billion, an increase of 6.1% compared to the prior year quarter. Excluding the impact from divested businesses(2) and currency, net sales increased 10.0%.
Worldwide Consumer second quarter net sales grew 4.3% compared to the prior year quarter. Excluding the impact from divested businesses and currency, Worldwide Consumer net sales were 9.2% higher year-over-year.
Consumer Self-Care Americas ("CSCA") achieved second quarter net sales of $628 million, up 7.8% versus the prior year quarter on a reported basis and 12.9% higher, excluding the impact from divested businesses and currency; Consumer Self-Care International ("CSCI") second quarter net sales decreased 2.0% versus the prior year quarter and 2.9% higher, excluding the impact from divested businesses and currency.
Reported diluted EPS for the second quarter of 2020 was $0.44 per diluted share as compared to EPS of $0.07 in the prior year quarter.
Adjusted diluted EPS for the second quarter of 2020 increased 19.8% to $1.03 as compared to $0.86 per diluted share in the prior year quarter.
Cash flow from operations as a percentage to adjusted net income was 206%.
Provided assurance of liquidity by completing a $750 million bond offering to refinance bonds previously due in 2021.
First Half 2020 Financial Highlights

Consolidated first half net sales were $2.6 billion, up 10.2% compared to the prior year. Excluding the impact of currency and divested businesses, net sales increased 13.8%, with organic net sales growth of 6.8%.
Worldwide Consumer net sales increased 10.3% compared to the prior year. Excluding the impact of currency and divested businesses, Worldwide Consumer net sales were 15.0% higher year-over-year.
CSCA achieved first half net sales of $1.3 billion, a 14.1% increase versus the prior year, or 18.8% higher excluding the impact of currency and divested businesses, highlighted by 8.3% organic growth.
CSCI first half net sales increased 3.8% versus the prior year, or 8.7% higher excluding divested businesses and the impact of currency, with organic growth of 2.6%.
Cash flow from operations as a percentage to adjusted net income was 155%.
See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures.

(1) Organic net sales growth excluded oral self-care acquisitions, divested businesses and the impact of currency.

(2) Divested businesses excluded 1) $20 million and $22 million from the divested animal health business in the prior year first quarter and second quarter periods, respectively, and was previously included in the Consumer Self-Care Americas segment, and 2) $4 million and $3 million from the divested Canoderm prescription product in the prior year first quarter and second quarter periods, respectively, which was previously included in the Consumer Self-Care International segment.

Refer to Tables I – IV at the end of this press release for a reconciliation of non-GAAP adjustments to the current year and prior year periods and additional non-GAAP information. The Company’s reported results are included in the attached Condensed Consolidated Statements of Operations, Balance Sheets and Statements of Cash Flows.

Second Quarter 2020 Consolidated Results Versus Second Quarter 2019

Consolidated net sales for the second quarter of calendar year 2020 increased 6.1%, or $70.1 million, to $1.2 billion. Net sales excluding divested businesses and unfavorable currency movements increased 10.0%, with organic net sales growth of 2.6%.

The increase in net sales was driven by 1) $82 million from the oral self-care portfolio acquisitions, 2) a $31 million net increase from the Prescription Pharmaceuticals ("RX") segment as $73 million in net sales generated by the launch of generic albuterol sulfate were partially offset by lower U.S. prescription dermatology volumes, 3) increased U.S. OTC sales due to continued strong fundamentals and rapid growth from channel shifting into e-commerce, both accelerated by a surge in consumer demand related to COVID-19, and 4) a less than expected consumer pantry de-load in U.S. OTC. These gains were partially offset by 1) lower demand in a number of CSCI categories due to travel bans, school closings and country lock-downs resulting from COVID-19, and 2) $26 million from divested businesses, $16 million from unfavorable currency movements and discontinued products of $11 million.

Reported net income was $61 million, or $0.44 per diluted share, versus net income of $9 million, or $0.07 per diluted share in the prior year period. Excluding certain charges as outlined in Table I, second quarter 2020 adjusted net income was $141 million, or $1.03 per diluted share, versus $117 million, or $0.86 per diluted share, for the same period last year. The 19.8% growth in adjusted diluted EPS was due primarily to the sales drivers mentioned above, reduced and delayed advertising and promotion expenditures compared to a year ago to align with consumer behavior surrounding COVID-19, and a decrease of approximately 640 basis points, or $0.08 per adjusted diluted share, in the adjusted effective tax rate compared to the prior year. This decrease was due primarily to a positive impact from the CARES Act, which was enacted in the first quarter 2020.

Worldwide Consumer Self-Care Second Quarter 2020 Results Versus Second Quarter 2019

Worldwide Consumer is comprised of the CSCA segment, CSCI segment and Corporate.

Worldwide Consumer Self-Care second quarter net sales increased 4.3% to $949 million. Net sales excluding $26 million from divested businesses and $17 million from the impact of currency increased 9.2%, while organic net sales were flat.

Second quarter reported gross profit margin was 36.8%. Adjusted gross profit margin of 39.3%, was 190 basis points lower year-over-year due to product mix, prioritization of products most needed by society surrounding COVID-19 and the acquisition of the lower gross margin oral self-care portfolio. These were partially offset by favorable operational efficiencies versus last year.

Reported operating margin was 7.3%. Adjusted operating margin increased 60 basis points year-over-year to 13.9% due primarily to operating leverage on gross margin flow-through and purposefully reduced and delayed advertising and promotion expenditures in response to consumer behavior surrounding COVID-19.

CSCA Second Quarter 2020 Results Versus Second Quarter 2019

Consumer Self-Care Americas achieved second quarter net sales of $628 million, an increase of 7.8%, and included $63 million in net sales attributable to the oral self-care portfolio. Organic net sales were up 1.6%.

OTC net sales growth was driven by 1) continued robust growth in e-Commerce, more than offsetting category declines due to lower foot traffic at brick and mortar customers, 2) increased consumer COVID-19 related demand, and 3) increased distribution of Perrigo products to retail customers. All of these drivers, which benefited from $9 million in new products, led to a share gain of 60 basis points in the product categories where Perrigo competes. These growth drivers were partially offset by 1) lower net sales on products Perrigo de-prioritized in order to keep up with demand for products most needed by society during COVID-19, 2) $22 million from the divested animal health business, and 3) normal pricing pressure on specific products.

In Nutrition, an increase in net sales was led by the December 2019 store brand infant formula launch at a major retailer, greater shipments in the infant formula contract manufacturing business, and growth in customer e-Commerce activities.

Second quarter reported gross margin was 31.8%. Adjusted gross margin of 32.9% was 110 basis points lower than the prior year due to the impact of normal pricing pressure, incremental expenses related to COVID-19 and the addition of the oral self-care portfolio, partially offset by favorable operational efficiencies.

Reported operating margin was 16.9%. Adjusted operating margin decreased 50 basis points to 19.8% as operating leverage on gross margin flow-through and delayed expenditures compared to a year ago in response to consumer behavior surrounding COVID-19 were more than offset by the addition of the oral self-care portfolio.

CSCI Second Quarter 2020 Results Versus Second Quarter 2019

Consumer Self-Care International net sales decreased 2.0% to $321 million. Excluding unfavorable currency movements of $12 million and $3 million from divested businesses, net sales were higher by 2.9%. Organic net sales were lower by 3.0%.

Net sales growth, excluding unfavorable currency movements and divested businesses, was due primarily to new product sales of $23 million, driven by XLS-Medical Forte 5 and products in the skincare and personal hygiene category, and $19 million in additional net sales from Ranir. These positive drivers were partially offset by 1) lower category sales due to COVID-19 travel bans, school closings and country lock-downs, which impacted consumer demand for certain CSCI products, and 2) some consumer pantry de-stocking of COVID-19 essential products after a surge in demand in the first quarter of 2020.

Reported gross margin was 46.5%. Adjusted gross margin of 51.7% declined 180 basis points as favorable operational efficiencies versus last year were more than offset by less favorable product mix and the addition of the oral self-care portfolio, which has a relatively lower gross margin than the legacy CSCI portfolio.

Reported operating margin was 3.3% and adjusted operating margin improved 30 basis points year over year to 15.6%. Lower gross profit flow-through was more than offset by purposefully delayed advertising and promotion expenditures in response to consumer behavior surrounding COVID-19.

RX Second Quarter 2020 Results Versus Second Quarter 2019

RX net sales increased 12.9% to $270 million due primarily to new product sales of $81 million led by the generic albuterol sulfate inhalation aerosol. This was partially offset by fewer patient visits to dermatologists compared to last year, leading to lower new and total U.S. prescription dermatology volumes(3) of 16% and 4%, respectively, which impacted Rx. Discontinued low margin products were $9 million.

Reported gross margin was 31.7% and adjusted gross margin was 39.5%. The 220 basis point decline in adjusted gross margin was due primarily to less favorable product mix.

Reported operating margin was 17.6%. Adjusted operating margin was 25.3%, down 210 basis points due primarily to gross profit flow-through.

(3) Source: IQVIA: COVID-19 Market Impact – w/e July 3, 2020; National Prescription Audit (NPA), National Prescription Audit: New to Brand (NPA NTB); 2019-2020.

Fiscal 2020 Outlook

The Company reaffirms its fiscal 2020 outlook with expected net sales growth of 6% to 7% highlighted by organic net sales growth of approximately 3%. Adjusted diluted EPS is expected to be in the range of $3.95 to $4.15. The Company reaffirms its adjusted EPS guidance despite the addition of $0.12 – $0.15 per adjusted diluted share of incremental COVID-19 related costs and a $0.06 per share impact from the divested Rosemont Rx business, which the Company sold on June 19, 2020.

The Company cannot reconcile its expected adjusted diluted earnings per share to diluted earnings per share under "Fiscal 2020 Outlook" without unreasonable effort because certain items that impact net income and other reconciling metrics are out of the Company’s control and/or cannot be reasonably predicted at this time.