On October 29, 2020 WuXi AppTec Co., Ltd. (stock code: 603259.SH / 2359.HK), a company that provides a broad portfolio of R&D and manufacturing services that enable companies in the pharmaceutical, biotech and medical device industries worldwide to advance discoveries and deliver groundbreaking treatments to patients, reported its financial results for the third quarter and nine months ended September 30, 2020 ("Reporting Period") (Press release, WuXi AppTec, OCT 29, 2020, View Source [SID1234569460]).

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This document serves purely as a summary and is not intended to provide a complete representation of the relevant matters. For further information, please refer to the 2020 third quarterly report and relevant announcements published on the websites of the Shanghai Stock Exchange (www.sse.com.cn) and the Stock Exchange of Hong Kong (www.hkexnews.hk), and the designated media for dissemination of the relevant information. Investors are advised to exercise caution and be aware of the investment risks in dealing in the shares of the Company.

All financials disclosed in this press release are prepared based on International Financial Reporting Standards (or "IFRSs").

The 2020 Third-Quarter Report of the Company has not been audited.

Third-Quarter 2020 Financial Highlights

Accelerated revenue growth of 35.4% year-over-year to RMB4,583 million.
– China-based laboratory services realized revenue of RMB2,338 million, representing a YoY growth of 38.9%. Both of our drug discovery services and laboratory testing services achieved strong growth. Our chemistry fee for services revenue grew about 53% and our drug safety assessment services revenue grew about 77%.
– CDMO services realized revenue of RMB1,548 million, representing a YoY growth of 54.9%. Our "Follow the Molecule" business model continued to perform very well.
– U.S.-based laboratory services realized revenue of RMB372 million, representing a YoY decline of 13.5%, mainly due to the impact of COVID-19 and customers’ projects delay.
– Clinical research and other CRO services realized revenue of RMB315 million, representing a YoY growth of 16.8%. The revenue growth rate continued to improve quarter-over-quarter.
Gross profit grew 28.2% year-over-year to RMB1,765 million. Gross profit margin was 38.5%, slightly lower than the 40.7% achieved in the third quarter 2019[1], mainly because of: (1) the impact of COVID-19 on our U.S.-based laboratory services and clinical research services business, (2) an increase in share-based compensation expenses.
Non-IFRS gross profit grew 26.9% YoY to RMB1,826 million. Non-IFRS gross profit margin was 40.1% compared to 42.1% for the same period in 2019. (1) The non-IFRS gross profit margin of our China-based laboratory services and CDMO services were largely in line with that of third quarter 2019. (2) Due to the impact of COVID-19, the non-IFRS gross profit margin of our U.S.-based laboratory services and clinical research and other CRO services declined.
Reported EBITDA down 10.4% Year-Over-Year to RMB1,035 million due to decrease of reported net profit.
Adjusted EBITDA grew 24.9% Year-Over-Year to RMB1,383 million.
Reported net profit attributable to owners of the Company declined 8.1% year-over-year to RMB651 million, mainly because: (1) In the third quarter of 2020, CNY appreciated sharply against the USD. We reported a RMB154 million net loss, due to realized and unrealized exchange loss of the proceeds of new H-Share placement and other USD assets held by the Company, partially offset by the gains from our foreign currency forward contracts. In the same period last year, we reported a RMB 4 million net gain. (2) Non-cash loss of RMB190 million from the derivative component of our convertible bonds due to the increase of our H share price.
Adjusted non-IFRS net profit attributable to owners of the Company increased strongly 44.3% year-over-year to RMB958 million.
Diluted EPS down 6.7% versus the same period last year while adjusted diluted non-IFRS EPS increased strongly by 37.9%.[2]
[1] If prepared under Accounting Standard for Business Enterprises of PRC, the gross profit grew 28.4% year-over-year to RMB1,772 million. Gross profit margin was 38.7%, slightly lower than the 40.8% achieved in the third quarter 2019.

[2] Gain in the fair value change of the investment portfolio of the company is RMB183 million in the current period, increased by RMB173 million compared with the gains in fair value of RMB10 million in the same period last year. Three months ended September 30, 2019 and three months ended September 30, 2020, we had a fully-diluted weighted average share count of 2,287,273,082 and 2,351,038,288 ordinary shares, respectively.

Year-to-Date 2020 Financial Highlights

Strong revenue growth of 27.3% year-over-year to RMB11,815 million.
– China-based laboratory services realized revenue of RMB6,118 million, representing a YoY growth of 30.9%.
– CDMO services realized revenue of RMB3,710 million, representing a YoY growth of 36.5%.
– U.S.-based laboratory services realized revenue of RMB1,154 million, representing a YoY growth of 1.2%.
– Clinical research and other CRO services realized revenue of RMB815 million, representing a YoY growth of 9.9%.
Gross profit grew 20.8% year-over-year to RMB4,423 million. Gross profit margin was 37.4%.[3]
Non-IFRS gross profit grew 23.7% YoY to RMB4,743 million. Non-IFRS gross profit margin was 40.1%.
Reported EBITDA grew 24.8% Year-Over-Year to RMB3,635 million.
Adjusted EBITDA grew 27.5% Year-Over-Year to RMB3,833 million.
Net profit attributable to owners of the Company grew 34.2% year-over-year to RMB2,368 million.
Adjusted non-IFRS net profit attributable to owners of the Company grew 34.4% year-over-year to RMB2,477 million.
Diluted EPS increased by 34.2% versus the same period last year while adjusted diluted non-IFRS EPS increased by 32.5%.[4]
[3] If prepared under Accounting Standard for Business Enterprises of PRC, the gross profit grew 21.1% year-over-year to RMB 4,440 million. Gross profit margin was 37.6%.

[4] The gains in the fair value of the investment portfolio of the company is RMB1,123 million in the first nine months, increased by RMB1,168 million compared with the losses in fair value of RMB 45 million in the same period last year. Nine months ended September 30, 2019 and nine months ended September 30, 2020, we had a fully-diluted weighted average share count of 2,287,319,809 and 2,318,953,908 ordinary shares, respectively.

Business Highlights

For nine months ended September 30 2020, we added over 900 new customers, increasing our active customer count to more than 4,100. Our "long-tail" strategy and "Follow the Customer/Follow the Project/Follow the Molecule" business model continued to perform very well.
– Our global platform continued to enable innovation worldwide. During the reporting period, our overseas customers contributed RMB9,023 million revenue, representing a YoY growth of 25.3%. Our China customers contributed RMB2,792 million revenue, representing a YoY growth of 34.4%.
– We continued to expand our customer base and retain existing customers. During the reporting period, our existing customers contributed RMB11,109 million revenue, representing a YoY growth of 29.1%. Our newly added customers contributed RMB706 million revenue.
– We continued to execute our "long-tail" strategy and increased our support to large global pharmaceutical companies. During the reporting period, our global "long-tail" customers and China-based customers contributed RMB7,938 million revenue, representing a YoY growth of 28.4%. The top 20 global pharmaceutical companies contributed RMB3,877 million revenue, representing a YoY growth of 25.1%.
– We continued to increase customer conversion and enhance synergies across our platform. During the reporting period, customers using services from more than one of our business units contributed RMB10,164 million revenue, representing a YoY growth of 27.1%.
We acquired Milestone Pharma to consolidate and expand the capacity of our analytical testing services.
Target-to-Hit platform enabled 359 customers globally and realized about RMB140 million revenue, representing a YoY growth of about 92%, which will also create incremental business opportunities for our downstream business units.
During the first nine months of 2020, our success-based drug discovery service unit submitted IND filings for 18 new chemical entities for our customers and obtained 20 CTAs. As of September 30, 2020, we have cumulatively submitted 103 NCE IND filings with the National Medical Products Administration (NMPA) for our customers and obtained 77 CTAs. As of September 30, 2020, there is 1 project in Phase III clinical trial, 9 projects in Phase II clinical trials, and 56 projects in Phase I clinical trials.
During the first nine months of 2020, we signed 78 integrated WIND packages with our customers, helping many of our customers submit their IND packages for global filings and obtain CTAs under eCTD format.
We added over 440 new molecules into our small molecule CDMO services pipeline. In addition to executing our ‘follow-the-molecule’ strategy, we also won 25 phase II/III projects externally transferred from our clients and their current CMOs. As of September 30, 2020, our small molecule CDMO pipeline has grown to more than 1,100 active projects, including 42 projects in Phase III clinical trials and 26 in commercial manufacturing.
4 WuXi STA sites passed China NMPA new drug pre-approval inspections (PAI) at the same time. This PAI success marked a milestone for STA with 4 records:
– It is WuXi STA’s first drug product pre-approval inspection.
– It is the first regulatory inspection for WuXi STA’s spray drying commercial manufacturing facility and process.
– This PAI is the first comprehensive inspection for WuXi STA’s integrated and end-to-end CMC platform including both drug substance and drug product.
– It is the first PAI involving four WuXi STA sites at the same time.
As of September 30, 2020, our U.S. cell and gene therapies CDMO business provided services for 33 clinical stage projects, including 22 projects in Phase I and 11 projects in Phase II/III. As of end of third quarter, 2020, the backlog of our cell and gene therapies CDMO business increased about 35% compared with the previous quarter. We expect about 2 to 3 products, including autologous cell therapy and allogeneic cell therapy products, will file for BLA with the FDA in 2021, which may become a significant growth driver for our U.S.-based laboratory services.
Our clinical research services continued to enable customers in China and the U.S. During the reporting period:
– SMO maintained its No.1 leadership position in China, with 3,100+ CRCs stationed in 145 cities. CDS team was comprised of 810+ employees distributed in China and the U.S.
– The backlog of our clinical research services increased significantly compared with the same period last year. As of September 30, 2020, the backlog of our CDS services increased about 100% and the backlog of our SMO services increased about 45%.
– SMO team assisted in the market approval of 14 products for our customers, including the approval of China’s first biosimilar product in the European Union. CDS team conducted 10 multi-regional clinical trials for our customers in the U.S. and China.
Management Comment

Dr. Ge Li, Chairman and CEO of WuXi AppTec, said, "We once again achieved accelerated revenue growth in the third quarter of 2020. The strong performance of our China-based laboratory services and CDMO services, as well as the gradual recovery of our clinical research and other CRO services, mitigated the challenges faced by our U.S.-based laboratory services due to the COVID-19 pandemic. We are delighted to see that our platform and business performed very well and we continued to meet customer demand and project delivery schedules during the pandemic. Through the end of September 2020, we added over 900 new customers and our total number of active customers now exceeds 4,100."

"Our global enabling platform and ‘Follow the Customer/Follow the Project/Follow the Molecule’ strategy continued to perform very well. In the third quarter, our China-based laboratory services as well as CDMO services revenue growth accelerated compared with the second quarter and we continued to gain market share across different business units. Our clinical research and other CRO services realized revenue growth and our backlog increased significantly. In spite of the impact of COVID-19, the backlog of our U.S.-based laboratory services grew strongly quarter-over-quarter. In the future, we expect commercial manufacturing projects under our CDMO services segment to become a significant revenue driver. The Company’s financial position is very strong. In September 2020, after raising HK$7.29 billion through the placement of new H shares, we completed the non-public issuance of 62.7 million A shares, receiving approximately RMB6.46 billion in net proceeds and providing the Company with a strong balance sheet for capacity expansion, especially for our CDMO segment."

Dr. Ge Li concluded, "We are grateful for the dedication of our employees and the partnership with our global customers, and remain committed to working with them to enable scientific and pharmaceutical innovation worldwide during this pandemic and beyond. Looking ahead, we will continue to invest in new capabilities and capacities that help our global partners bring groundbreaking medicines and treatments to patients in need, realizing our vision that ‘every drug can be made and every disease can be treated’."

On October 29, 2020 DuPont (NYSE: DD) reported financial results for the third quarter 2020 (Press release, DuPont, OCT 29, 2020, View Source [SID1234569458]).

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"Our team remains committed to emphasizing the safety and well-being of our employees, prioritizing the needs of our customers, and executing on a playbook that enables us to quickly respond to the changing environment" said Ed Breen, DuPont Executive Chairman and Chief Executive Officer. "This commitment is evident in the results we announced today. We delivered strong performance demonstrating the value our market-leading innovation and technology provides in key end-markets such as semiconductors, smartphones, water filtration, probiotics, and personal protective equipment. The actions we have taken to right-size our cost structure and generate significant cash flow are delivering results today and we intend to maintain this momentum as we move forward."

"In September, we completed the sale of our trichlorosilane business and our stake in the Hemlock Semiconductor joint venture and earlier this month we signed an agreement to sell the Biomaterials business," Breen continued. "Execution of these Non-Core divestitures and the continued progress towards the anticipated closing of the Nutrition & Biosciences transaction(1) in the first quarter 2021 exemplify our commitment to create both market-leading businesses and value for our shareholders."

Third Quarter 2020 Results

Net sales totaled $5.1 billion, down 6 percent versus the year-ago period on both an as reported and organic basis. Growth in Electronics & Imaging was more than offset by sales declines in the other segments primarily due to the impact of the global pandemic.

On a regional basis, organic sales increased 3 percent in Asia Pacific versus the year-ago period while the U.S. and Canada declined 10 percent, EMEA declined 15 percent, and Latin America declined 3 percent. China sales in our core segments improved 14 percent versus the third quarter 2019 and 10 percent sequentially from second quarter 2020.

GAAP EPS from continuing operations totaled $(0.11) on a GAAP loss from continuing operations of $(72) million, versus GAAP EPS from continuing operations of $0.49 on GAAP income from continuing operations of $372 million in the year-ago period. This decline is mostly attributable to non-cash impairment charges associated with Non-Core businesses, higher merger-related amortization expense and lower segment results, partially offset by gains associated with divestitures of Non-Core businesses.

Operating EBITDA(2) was $1.3 billion, down 7 percent versus operating EBITDA(2) in the prior year. The impact of lower demand, cost associated with idled facilities, and portfolio changes more than offset manufacturing productivity gains, approximately $150 million of non-manufacturing cost savings and strong demand in semiconductors, smartphones, water, Tyvek protective garments, and health & wellness. Adjusted EPS(2) decreased 8 percent to $0.88, compared with adjusted EPS(2) in the year-ago period of $0.96, primarily driven by lower segment results and a higher base tax rate partially offset by declines in interest expense, foreign exchange losses, and share count. A continued focus on cost control enabled operating EBITDA declines in-line with the decline in net sales on a percentage basis.

Operating cash flow of $1.3 billion included improvements in working capital of more than $300 million in the quarter which was driven by lower inventories. Capital expenditures of approximately $200 million resulted in free cash flow(2) of $1.1 billion. The sale of the trichlorosilane business and the Hemlock Semiconductor joint venture provided $550 million of additional pre-tax cash proceeds in the quarter. Proceeds from these sales as well as organic cashflow generation enabled a reduction in commercial paper balances to less than $400 million as of September 30, 2020; a reduction of $1.2 billion in the quarter.

(1)

Closing of transaction with IFF is subject to regulatory approval and customary closing conditions.

(2)

Adjusted EPS, operating EBITDA and free cash flow are non-GAAP measures. See page 7 for further discussion. Reconciliation to the most directly comparable GAAP measure, including details of significant items begins on page 13 of this communication.

Third Quarter 2020 Segment Highlights

Electronics & Imaging
Electronics & Imaging reported a record quarter with net sales of $1.0 billion, up 7 percent from the year-ago period. Organic sales were up 8 percent driven by a 9 percent growth in volume offset by a 1 percent decline in price. Currency was neutral and portfolio was a 1 percent headwind.

Sales gains were led by Semiconductor Technologies as new technology ramps across logic and foundry delivered high-single digit organic growth versus the year-ago period. Interconnect Solutions organic sales also increased high-single digits, despite an overall decline in the global smartphone market, driven by higher material content in premium, next-generation smartphones. Within Image Solutions, mid single-digit organic growth was led by strength in OLEDs for displays and ink for the consumer segment, partially offset by weakness in flexographic plates and textile inks.

Operating EBITDA for the segment was $357 million, an increase of 12 percent from operating EBITDA of $320 million in the year-ago period, driven primarily by strong volume growth and continued productivity actions.

Nutrition & Biosciences
Nutrition & Biosciences reported net sales of $1.5 billion, down 4 percent from the year-ago period on both an as reported and organic basis driven by lower volumes. Price, currency and portfolio impacts were each neutral versus third quarter 2019.

Within Health & Biosciences, double-digit growth in both probiotics and home and personal care markets was more than offset by continued weakness in biorefinery and microbial control. Pricing gains in Food & Beverage were more than offset by weaker demand primarily in emulsifiers, sweeteners, and cellulosics driven by declines in food service and lower consumer demand for mints and chewing gums in travel and convenience stores. Pharma Solutions sales were flat with the prior year.

Operating EBITDA for the segment was $379 million, an increase of 7 percent from operating EBITDA of $354 million in the year-ago period. Continued productivity actions and favorable product mix more than offset the impact of lower volumes leading to a 260 basis point improvement in operating EBITDA margins versus the year-ago period.

Transportation & Industrial
Transportation & Industrial reported net sales of $1.0 billion, down 14 percent from the year-ago period. Organic sales were down 14 percent with volume down 9 percent and price lower by 5 percent. Currency and portfolio impacts were both neutral versus third quarter 2019.

Volume declined 9 percent due to lower auto builds. Although a significant improvement versus second quarter performance the global auto market continues its recovery from steep declines in the first half of the year. The impact of COVID-19 on other key industrial markets, in addition to automotive, contributed to volume declines across Mobility Solutions, Industrial & Consumer, and Healthcare & Specialty. Strong demand for differentiated, high performance seals in semiconductor manufacturing lifted Kalrez revenues high-teens percent.

Operating EBITDA for the segment was $242 million, a decrease of 21 percent from operating EBITDA of $306 million in the year-ago period, as savings from productivity actions were more than offset by volume declines, lower price, and the impact of temporarily idled facilities.

Safety & Construction
Safety & Construction reported net sales of $1.2 billion, down 6 percent from the year-ago period. Organic sales were down 9 percent with a 1 percent price improvement offset by a 10 percent decline in volume. Acquisitions in the Water Solutions business increased reported sales by 3 percent. Currency was neutral.

Continued broad-based demand across Water Solutions was more than offset by declines in both Safety Solutions and Shelter Solutions. Within Safety Solutions, demand for Tyvek protective garments remained strong but was more than offset by soft demand for aramid fibers across aerospace, oil & gas and select industrial markets as a result of COVID-19. Similarly, within Shelter Solutions, growth in residential construction and retail channels for do-it-yourself applications was more than offset by weak commercial construction.

Operating EBITDA for the segment totaled $324 million, a decrease of 8 percent from operating EBITDA of $352 million in the year-ago period. Continued productivity actions as well as favorable product mix was more than offset by lower volumes and the impact of temporarily idled facilities.

Non-Core
Non-Core reported net sales of $331 million, down 23 percent from the year-ago period. Organic sales were down 13 percent driven by 18 percent volume declines and offset by 5 percent pricing gains. The September 2019 divestiture of the DuPont Sustainable Solutions business and the September 2020 divestiture of the trichlorosilane business reduced sales by 10 percent. Currency was neutral.

Operating EBITDA for the segment was $14 million, a decrease of 85 percent from operating EBITDA of $94 million in the year-ago period. The absence of a prior year gain on the sale of DuPont Sustainable Solutions, lower volumes and the impact of the trichlorosilane and Hemlock Semiconductor divestitures in September 2020 more than offset cost productivity.

Outlook

"With a continued focus on execution, we anticipate a fourth quarter underscored by additional cash generation and operating leverage across our core segments driven by additional cost savings," said Lori Koch, Chief Financial Officer of DuPont. "We expect to deliver full-year 2020 adjusted EPS(2) in the range of $3.17 to $3.21 on net sales of $20.1 billion to $20.2 billion."

Conference Call
The Company will host a live webcast of its third quarter earnings conference call with investors to discuss its results and business outlook today at 8:00 a.m. ET. The slide presentation that accompanies the conference call will be posted on the DuPont’s Investor Relations Events and Presentations page. A replay of the webcast also will be available on the DuPont’s Investor Relations Events and Presentations page following the live event.

On October 29, 2020 IDEXX Laboratories, Inc. (NASDAQ: IDXX), a global leader in veterinary diagnostics, veterinary practice software and water microbiology testing, reported third quarter results, as well as business and market condition updates related to the 2019 novel coronavirus (COVID-19) pandemic (Press release, IDEXX Laboratories, OCT 29, 2020, View Source [SID1234569456]).

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Third Quarter Results

The Company reports revenues of $722 million for the third quarter of 2020, an increase of 19% on a reported and 18% on an organic basis. Third quarter results were driven by Companion Animal Group ("CAG") Diagnostics recurring revenue growth of 23% reported and 21% organic, supported by similarly high organic gains in both U.S. and International markets, as well as revenue growth of 18% in the Livestock, Poultry and Dairy ("LPD") business. Third quarter growth benefited by approximately 1% from revenues associated with OPTI Medical Systems COVID-19 human PCR testing. Third quarter results were moderated by constrained new CAG instrument placement levels and lower Water business revenues, reflecting pressures on non-compliance water testing, impacted by factors related to the COVID-19 pandemic.

Earnings per diluted share ("EPS") was $1.69 for the third quarter, representing 36% growth on a reported basis and 47% growth on a comparable constant currency basis, which excludes $0.24 per share impact from an ongoing litigation matter involving a royalty claim under an expired patent license agreement and tax benefits from share-based compensation of $0.18 per share. Comparable constant currency growth measures are non-GAAP financial measures and have been modified to exclude the related operating expense impact of $27.5 million, in addition to share-based compensation tax benefits, as described in our footnotes. EPS results reflected benefits from strong CAG Diagnostics recurring revenue growth, which supported gross margin gains and operating expense leverage, augmented by proactive cost control efforts. Overall operating margins improved 70 basis points on a reported basis compared to prior year levels and 470 basis points on a comparable constant currency basis.

"We are very pleased to report excellent third quarter financial results, which reflect impressive global growth in our CAG business and outstanding efforts by the IDEXX team to support the needs of our customers during a dynamic global pandemic environment," said Jay Mazelsky, the Company’s President and Chief Executive Officer. "We are very encouraged by the sustained strong recovery in pet healthcare, which reinforces our optimism in the long-term growth potential for our companion animal diagnostics business and positions us well to deliver continued strong financial results."

Market Trend and COVID-19 Pandemic Impact Update

Companion animal healthcare markets continued to build on the sharp V-shaped recovery seen in the second quarter globally. U.S. veterinary practices have experienced strong clinical demand benefiting from continued solid non-wellness visit growth, incremental growth from postponed wellness visits and an increase in new patient visits. In the U.S., same-store clinical visit growth sustained at 6% within the third quarter, supported by 3% growth in non-wellness visits and 11% growth in wellness visits, benefiting from pent-up demand. Revenue growth at veterinary practices is also benefiting from higher growth in services, including an increasing utilization of diagnostics, which supported 11% growth in same-store practice revenue in the U.S. in the third quarter. Solid same-store clinical visit gains have continued in October, reflected in 5% same-store clinical visit growth for the two-week period ended October 16. U.S. companion animal practice weekly key metrics are available in the Q3 2020 Earnings Snapshot accessible on the IDEXX website, www.idexx.com/investors.

Strong global companion animal market trends have supported exceptional demand for CAG diagnostic products and services. Global CAG Diagnostics recurring revenues sustained their growth at high levels through the third quarter reflected in greater than 20% growth early in the quarter and growth closer to 20% in the later part of the quarter, benefiting in part from pent-up demand for wellness diagnostic testing in the U.S..

These trends are encouraging and reflect the resilience of the pet healthcare market. Potential effects related to ongoing COVID-19 case management efforts are challenging to predict and may pressure future revenues should enhanced social distancing policies and higher infection rates impact veterinary clinic operations in certain regions.

In managing IDEXX businesses, the Company continues to provide high levels of service delivery and product support for customers during this time and maintains high health and safety standards to protect its employees and ensure business continuity. In an effort to continue to protect the health and safety of our workforce and their families and communities, the majority of IDEXX employees continue to work remotely and travel continues to be limited.

Third Quarter Performance Highlights

Companion Animal Group

The Companion Animal Group generated 20% reported and 18% organic revenue growth for the quarter, supported by CAG Diagnostics recurring revenue growth of 23% on a reported and 21% on an organic basis. Growth was similarly high across IDEXX’s major modalities in the third quarter, reflecting continued strong growth in clinical visits and related diagnostic products and services. Overall CAG revenue growth was constrained by lower instrument placements, which improved relative to second quarter trends, but continue to be impacted by COVID-19 related restrictions on access to veterinary practices. Despite these constraints, IDEXX achieved 3,173 premium instrument placements, supporting a 14% expansion of IDEXX’s global premium instrument installed base.

IDEXX VetLab consumables generated 23% reported and 22% organic revenue growth, supported by ongoing expansion of our global premium instrument installed base, continued strong customer retention, increases in testing utilization and moderate net price gains.
Reference laboratory diagnostic and consulting services generated 24% reported and 21% organic revenue growth, led by growth in U.S. markets benefiting from strong market growth including high demand for wellness testing, as well as moderate net price realization and benefits from net new customer additions.
Rapid assay products revenues grew 20% on a reported and organic basis, led by high growth in SNAP 4Dx Plus sales volumes in U.S. markets benefiting from strong overall market conditions including high demand for wellness testing.
Veterinary software, services and diagnostic imaging systems revenues grew 4% on a reported and organic basis, supported by double-digit growth in subscription-based service revenues and strong growth in new veterinary software system placements. Overall growth was moderated by declines in diagnostic imaging systems placements.

Water

Water revenues declined 5% on a reported basis and 4% on an organic basis for the quarter, reflecting continued pressures in non-compliance testing volumes impacted by the COVID-19 pandemic.

Livestock, Poultry and Dairy ("LPD")

LPD revenues grew 18% on a reported and organic basis, driven by strong growth in the Asia Pacific region. LPD results were supported by improvements in core swine testing volumes, continued benefits from African Swine Fever diagnostic testing programs in Asia, and growth in poultry testing. These gains were moderated by lower herd health screening levels, compared to strong prior year results.

Gross Profit and Operating Profit

Gross profits increased 23% on a reported and constant currency basis. Gross margin of 58.5% increased 150 basis points compared to prior year period results on a reported basis and 200 basis points on a constant currency basis. Gross margin results reflected reference laboratory productivity gains on high revenue growth, favorable mix from strong consumable revenue and lower instrument revenue, as well as benefits from moderate price gains.

Operating margin was 23.8% in the quarter, 70 basis points higher than the prior year period results on a reported basis and 470 basis points higher on a comparable constant currency basis, supported by operating expense leverage on stronger than expected revenue growth. Operating expenses increased 22% on a reported basis, reflecting the $27.5 million accrual related to the ongoing litigation noted earlier, and increased 9% on a comparable constant currency basis. Operating expenses in the third quarter included a $10 million contribution to establish the IDEXX Foundation, a donor-advised charitable fund, focused on making a positive impact on our communities. Priorities for the IDEXX Foundation will include supporting education in the veterinary and STEM fields, including advancing diversity, equity and inclusion in animal healthcare. Given the strong recovery in its core CAG business, the Company plans to advance prioritized investments in support of its long-term growth strategy and anticipates sustaining a relatively higher rate of operating expense growth moving forward.

2020 and 2021 Financial Outlook

The Company is maintaining suspension of full-year 2020 guidance due to the unpredictability of potential future impacts from the COVID-19 pandemic and is not providing preliminary 2021 guidance at this time.

Conference Call and Webcast Information

IDEXX Laboratories, Inc. will be hosting a conference call today at 8:30 a.m. (EDT) to discuss its third quarter 2020 results and management’s outlook. To participate in the conference call, dial 1-888- 771-4371 or 1-847-585-4405 and reference confirmation number 49967945. Individuals can access a live webcast of the conference call through a link on the IDEXX website, www.idexx.com/investors. An archived edition of the webcast will be available after 1:00 p.m. (EDT) on that day via the same link and will remain available for one year.

On October 29, 2020 Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) reported that the U.S. Food and Drug Administration (FDA) has accepted for priority review the supplemental Biologics License Application (sBLA) for PD-1 inhibitor Libtayo (cemiplimab-rwlc) to treat patients with first-line locally advanced or metastatic non-small cell lung cancer (NSCLC) with ≥50% PD-L1 expression (Press release, Regeneron, OCT 29, 2020, View Source [SID1234569455]). The target action date for the FDA decision is February 28, 2021.

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The sBLA is supported by results from a Phase 3 open-label, randomized, multi-center trial that investigated the first-line treatment of Libtayo monotherapy compared to platinum-doublet chemotherapy in patients with locally advanced or metastatic NSCLC whose tumor cells expressed PD-L1, including those whose cancers had confirmed PD-L1 expression of ≥50% using the PD-L1 IHC 22C3 pharmDx kit. Results were recently presented at the 2020 European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Virtual Congress in September.

The European Medicines Agency (EMA) is also assessing Libtayo in advanced NSCLC with ≥50% PD-L1 expression and a decision is expected in the second quarter of 2021. Libtayo is the first systemic treatment approved in the U.S. and European Union (EU) for adults with metastatic cutaneous squamous cell carcinoma (CSCC) or locally advanced CSCC who are not candidates for curative surgery or curative radiation.

Libtayo is being jointly developed and commercialized by Regeneron and Sanofi under a global collaboration agreement. The use of Libtayo to treat advanced NSCLC is investigational and has not been fully evaluated by any regulatory authority.

About Non-small Cell Lung Cancer
Lung cancer is the leading cause of cancer death worldwide, with more than 2.2 million new cases expected globally, and 228,000 new cases expected in the U.S. in 2020. Approximately 85% of all lung cancers are NSCLC, and an estimated 25% to 30% of these cases are expected to test positive for PD-L1 in ≥50% of tumor cells. While immunotherapies have transformed advanced NSCLC treatment in recent years, there remains an unmet need to optimize the identification and treatment of patients with high PD-L1 expression and offer additional treatment options.

About Libtayo
Libtayo is a fully-human monoclonal antibody targeting the immune checkpoint receptor PD-1 on T-cells. By binding to PD-1, Libtayo has been shown to block cancer cells from using the PD-1 pathway to suppress T-cell activation.

Libtayo was invented using Regeneron’s proprietary VelocImmune technology that utilizes a genetically-engineered mouse platform endowed with a genetically-humanized immune system to produce optimized fully-human antibodies. VelocImmune technology has been used to create multiple antibodies including Dupixent (dupilumab), Praluent (alirocumab) and Kevzara (sarilumab), which are approved in multiple countries around the world. Regeneron previously used these technologies to rapidly develop a treatment for Zaire ebolavirus infection, which is approved by the FDA, and to create a potentially preventative and therapeutic investigational medicine for COVID-19 that was recently submitted to the FDA for an Emergency Use Authorization (EUA).

The extensive clinical program for Libtayo is focused on difficult-to-treat cancers. In skin cancer, this includes trials in adjuvant and neoadjuvant CSCC in addition to a pivotal trial in advanced basal cell carcinoma. Libtayo is also being investigated in pivotal trials in NSCLC (in combination with chemotherapy) and cervical cancer, as well as in trials combining Libtayo with either conventional or novel therapeutic approaches for both solid tumors and blood cancers. These potential uses are investigational, and their safety and efficacy have not been evaluated by any regulatory authority.

IMPORTANT SAFETY INFORMATION AND INDICATION FOR U.S. PATIENTS

What is Libtayo?
Libtayo is a prescription medicine used to treat people with a type of skin cancer called cutaneous squamous cell carcinoma (CSCC) that has spread or cannot be cured by surgery or radiation.

It is not known if Libtayo is safe and effective in children.

What is the most important information I should know about Libtayo?
Libtayo is a medicine that may treat a type of skin cancer by working with your immune system. Libtayo can cause your immune system to attack normal organs and tissues in any area of your body and can affect the way they work. These problems can sometimes become severe or life-threatening and can lead to death. You can have more than one problem at the same time. These problems may happen anytime during treatment or even after your treatment has ended.

Call or see your healthcare provider right away if you develop any symptoms of the following problems or these symptoms get worse:

Lung problems (pneumonitis). Signs and symptoms of pneumonitis may include new or worsening cough, shortness of breath, and chest pain.
Intestinal problems (colitis) that can lead to tears or holes in your intestine. Signs and symptoms of colitis may include diarrhea (loose stools) or more frequent bowel movements than usual; stools that are black, tarry, sticky or that have blood or mucus; and severe stomach-area (abdomen) pain or tenderness.
Liver problems (hepatitis). Signs and symptoms of hepatitis may include yellowing of your skin or the whites of your eyes, severe nausea or vomiting, pain on the right side of your stomach area (abdomen), drowsiness, dark urine (tea colored), bleeding or bruising more easily than normal, and feeling less hungry than usual.
Hormone gland problems (especially the adrenal glands, pituitary, thyroid and pancreas). Signs and symptoms that your hormone glands are not working properly may include headaches that will not go away or unusual headaches, rapid heartbeat, increased sweating, extreme tiredness, weight gain or weight loss, dizziness or fainting, feeling more hungry or thirsty than usual, hair loss, feeling cold, constipation, deeper voice, very low blood pressure, urinating more often than usual, nausea or vomiting, stomach-area (abdomen) pain, and changes in mood or behavior, such as decreased sex drive, irritability, or forgetfulness.
Kidney problems, including nephritis and kidney failure. Signs of these problems may include decrease in your amount of urine, blood in your urine, swelling in your ankles, and loss of appetite.
Skin problems. Signs of these problems may include rash, itching, skin blistering, and painful sores or ulcers in the mouth, nose, throat, or genital area.
Problems in other organs. Signs of these problems may include headache, tiredness or weakness, sleepiness, changes in heartbeat (such as beating fast, seeming to skip a beat, or a pounding sensation), confusion, fever, muscle weakness, balance problems, nausea, vomiting, stiff neck, memory problems, seizures (encephalitis), swollen lymph nodes, rash or tender lumps on skin, cough, shortness of breath, vision changes, or eye pain (sarcoidosis), seeing or hearing things that are not there (hallucinations), severe or persistent muscle pain, severe muscle weakness, low red blood cells (anemia), bruises on the skin or bleeding, and changes in eyesight.
Rejection of a transplanted organ. Your doctor should tell you what signs and symptoms you should report and monitor you, depending on the type of organ transplant that you have had.
Infusion (IV) reactions that can sometimes be severe and life-threatening. Signs of these problems may include chills or shaking, itching or rash, flushing, shortness of breath or wheezing, dizziness, fever, feeling of passing out, back or neck pain, and facial swelling.
Getting medical treatment right away may help keep these problems from becoming more serious.

Your healthcare provider will check you for these problems during your treatment with Libtayo. Your healthcare provider may treat you with corticosteroid or hormone replacement medicines. Your healthcare provider may delay or completely stop treatment if you have severe side effects.

Before you receive Libtayo, tell your healthcare provider about all your medical conditions, including if you:

have immune system problems such as Crohn’s disease, ulcerative colitis, or lupus;
have had an organ transplant;
have lung or breathing problems;
have liver or kidney problems;
have diabetes;
are pregnant or plan to become pregnant; Libtayo can harm your unborn baby
Females who are able to become pregnant:
Your healthcare provider will give you a pregnancy test before you start treatment.
You should use an effective method of birth control during your treatment and for at least 4 months after your last dose of Libtayo. Talk with your healthcare provider about birth control methods that you can use during this time.
Tell your healthcare provider right away if you become pregnant or think you may be pregnant during treatment with Libtayo.
are breastfeeding or plan to breastfeed. It is not known if Libtayo passes into your breast milk. Do not breastfeed during treatment and for at least 4 months after the last dose of Libtayo.
Tell your healthcare provider about all the medicines you take, including prescription and over- the-counter medicines, vitamins, and herbal supplements.

The most common side effects of Libtayo include tiredness, rash, diarrhea, muscle or bone pain, and nausea. These are not all the possible side effects of Libtayo. Call your doctor for medical advice about side effects. You may report side effects to FDA at 1-800-FDA-1088. You may also report side effects to Regeneron Pharmaceuticals and Sanofi at 1-877-542-8296.

On October 29, 2020 Alkermes plc (Nasdaq: ALKS) reported financial results for the third quarter of 2020 and provided updated financial expectations for full-year 2020 (Press release, Alkermes, OCT 29, 2020, View Source [SID1234569453]).

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"Over the past several months, we achieved a number of important milestones in our development programs against the backdrop of strong commercial execution and disciplined management of our expenses. The positive outcome of the ALKS 3831 FDA Advisory Committee meeting and the presentation of accumulating data for ALKS 4230, including monotherapy responses observed in melanoma, were significant achievements that underscore the potential value of these investigational medicines," said Richard Pops, Chief Executive Officer of Alkermes. "As we look ahead, we will continue to focus on our strategic imperatives: commercial execution, including preparations for the potential launch of ALKS 3831, aggressive development of our pipeline candidates, and efficient management of our operating cost structure, as we position the company for long-term value creation."

Quarter Ended Sept. 30, 2020 Financial Highlights

Total revenues for the quarter were $265.0 million, compared to $255.2 million for the same period in the prior year.
Net loss according to generally accepted accounting principles in the U.S. (GAAP) was $0.1 million for the quarter, or a GAAP net loss per share of $0.00. This compared to GAAP net loss of $52.9 million, or a GAAP net loss per share of $0.34, for the same period in the prior year.
Non-GAAP net income was $41.5 million for the quarter, or a non-GAAP basic and diluted earnings per share of $0.26. This compared to non-GAAP net loss of $7.0 million, or a non-GAAP basic and diluted loss per share of $0.04, for the same period in the prior year.
Quarter Ended Sept. 30, 2020 Financial Results

Revenues

Net sales of proprietary products were $142.7 million, compared to $138.8 million for the same period in the prior year.
Net sales of VIVITROL were $80.3 million, compared to $85.2 million for the same period in the prior year, representing a decrease of 6%, due primarily to COVID-19 pandemic-related disruptions. Sequentially, net sales of VIVITROL increased 12%, driven by increased demand during the quarter.
Net sales of ARISTADAi were $62.4 million, compared to $53.6 million for the same period in the prior year, representing an increase of 16%, driven primarily by continued growth of the ARISTADA provider base and growth of the ARISTADA two-month dose.
Manufacturing and royalty revenues were $120.4 million, compared to $103.8 million for the same period in the prior year.
Manufacturing and royalty revenues from RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA were $87.9 million, compared to $76.7 million for the same period in the prior year, primarily driven by an increase in royalty revenue from INVEGA SUSTENNA and the timing of manufacturing shipments of RISPERDAL CONSTA.
Costs and Expenses

Total operating expenses were $275.7 million, compared to $308.9 million for the same period in the prior year. This decrease reflects the impact of the restructuring implemented in 2019 and expense management measures in 2020.
Research and Development (R&D) expenses were $95.0 million, compared to $107.7 million for the same period in the prior year.
Selling, General and Administrative (SG&A) expenses were $127.7 million, compared to $148.7 million for the same period in the prior year.
Balance Sheet

At Sept. 30, 2020, Alkermes recorded cash, cash equivalents and total investments of $597.2 million, compared to $539.6 million at June 30, 2020, driven by the company’s operating results and changes in working capital. The company’s total debt outstanding as of Sept. 30, 2020 was $275.5 million under its term loan, which matures in March 2023.
"Our third quarter results reflect strong commercial execution, with the sequential growth of both VIVITROL and ARISTADA net sales within a complex and dynamic COVID-19 market environment. Today, we are pleased to be raising our financial guidance for 2020 to reflect this solid performance. Importantly, expectations for 2020 non-GAAP net income are back in line with the expectations provided in February prior to the impact of COVID-19, primarily due to disciplined management of our expenses," commented James Frates, Chief Financial Officer of Alkermes. "As we approach the end of 2020, we believe we are well-positioned to execute on our strategic imperatives to drive long-term profitability and growth."

Financial Expectations for 2020
The following financial expectations for 2020 are based on recent trends and assume that treatment provider practices and patient access to the company’s commercial products continue to normalize. New COVID-19-related restrictions or a resurgence of COVID-19 could impact the company’s ability to meet these expectations. All line items are according to GAAP, except as otherwise noted.
Recent Events

Psychiatry portfolio
In October 2020, announced positive vote outcomes from the joint meeting of the Psychopharmacologic Drugs Advisory Committee and the Drug Safety and Risk Management Advisory Committee, appointed by the U.S. Food and Drug Administration (FDA), on questions relating to ALKS 3831 for the treatment of adults with schizophrenia and for the treatment of adults with bipolar I disorder. The joint advisory committee’s recommendations, while not binding, will be considered by the FDA in its review of the ALKS 3831 New Drug Application (NDA). The Prescription Drug User Fee Act (PDUFA) target action date for the ALKS 3831 NDA is Nov. 15, 2020.
In September 2020, presented new real-world outcomes research and clinical data related to Alkermes’ psychiatry portfolio at the Psych Congress 2020 Virtual Experience, including new outcomes research that analyzed treatment challenges of second-generation antipsychotics, such as weight gain and treatment interruptions, for patients living with schizophrenia or bipolar I disorder.
In August 2020, announced the publication in the peer-reviewed American Journal of Psychiatry of results from the phase 3 ENLIGHTEN-2 clinical trial of ALKS 3831. ENLIGHTEN-2 was a six-month study evaluating the weight gain profile of ALKS 3831 compared to olanzapine in 561 patients with stable schizophrenia. Positive topline data from the ENLIGHTEN-2 study were first reported in November 2018.
ALKS 4230
In September 2020, presented new clinical data updates from ARTISTRY-1, an ongoing phase 1/2 study evaluating Alkermes’ investigational engineered interleukin-2 variant immunotherapy, ALKS 4230, administered intravenously as monotherapy and in combination with the PD-1 inhibitor pembrolizumab in patients with refractory solid tumors, at the 2020 European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Virtual Congress. The company also announced the expansion of the ARTISTRY-1 monotherapy melanoma cohort based on the achievement of protocol-defined efficacy response criteria.
In August 2020, announced the initiation of ARTISTRY-3, a phase 2 study evaluating the clinical and immunologic effects of ALKS 4230 monotherapy administered intravenously on the tumor microenvironment in a variety of advanced, malignant solid tumors.
Conference Call
Alkermes will host a conference call and webcast presentation with accompanying slides at 8:00 a.m. ET (12:00 p.m. GMT) on Thursday, Oct. 29, 2020, to discuss these financial results, financial expectations, and provide an update on the company. The webcast may be accessed on the Investors section of Alkermes’ website at www.alkermes.com. The conference call may be accessed by dialing +1 877 407 2988 for U.S. callers and +1 201 389 0923 for international callers. In addition, a replay of the conference call will be available from 11:00 a.m. ET (3:00 p.m. GMT) on Thursday, Oct. 29, 2020, through Thursday, Nov. 5, 2020, and may be accessed by visiting Alkermes’ website or by dialing +1 877 660 6853 for U.S. callers and +1 201 612 7415 for international callers. The replay conference ID is 13712082.