On March 1, 2022 Epizyme (Nasdaq: EPZM), a fully integrated, commercial-stage biopharmaceutical company developing and delivering transformative therapies for cancer against novel epigenetic targets, reported fourth quarter and full year 2021 financial results and provided business and portfolio updates (Press release, Epizyme, MAR 1, 2022, View Source [SID1234609288]).

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"Epizyme entered 2022 demonstrating continued progress on our commercial efforts to drive prescription growth for TAZVERIK as a monotherapy, as well as advancing our key combination clinical studies, which we believe have the potential to significantly expand the value and reach of TAZVERIK among physicians and patients as the data mature," said Grant Bogle, President and Chief Executive Officer. "In support of our commercialization and development efforts, we continue to make operational changes to reduce our expenses and extend our cash runway, while strategically deploying our resources to the areas we believe may be of highest impact for the company and its stakeholders."

Recent Highlights and 2022 Projected Milestones

TAZVERIK (tazemetostat) commercial progress:
TAZVERIK generated net product revenue of $11.6 million for the fourth quarter and $30.9 million for the full year 2021, including $4.2 million and $7.4 million, respectively, related to the sale of TAZVERIK commercial product for third-party pharmaceutical company use in clinical trials. TAZVERIK commercial net sales in the fourth quarter of 2021 were $7.4 million, representing an increase of approximately 42% when compared to $5.2 million in the third quarter of 2021.
The amount of free goods supplied to patients through Epizyme’s patient assistance program represented approximately 29% of total end user demand for the fourth quarter of 2021 and approximately 24% for the full-year 2021.
Total end user demand in the fourth quarter of 2021 represented a 14% increase over third quarter 2021 levels. This increase was driven primarily by sales for follicular lymphoma (FL).
Global start-up of Phase 3 portion of SYMPHONY-1 study underway; updated safety run-in data from Phase 1b portion expected in 2022: After completing the 30-day waiting period for its protocol amendment submitted to the U.S. Food and Drug Administration (FDA) in December 2021 with 800 mg twice-daily as the recommended Phase 3 dose, Epizyme accelerated global start-up activities, including sites in greater China with our collaboration partner HUTCHMED, for the Phase 3 portion of the SYMPHONY-1 (EZH-302) study, a confirmatory study assessing tazemetostat in combination with rituximab + lenalidomide (R2) compared with R2 plus placebo in patients with relapsed or refractory (R/R) FL previously treated with at least one systemic therapy, including those who are rituximab-refractory and/or have progression of disease within two years. The Company is currently screening patients in the Phase 3 portion and expects to enroll the first patient in the first quarter of 2022. Follow-up data from the Phase 1b safety run-in portion of the study are expected to be presented at a medical conference later this year.
LYSA Phase 2 study enrollment nearly complete; interim results expected in second half of 2022: Enrollment for the Phase 2 portion of the Lymphoma Study Association (LYSA) study, a Phase 1b/2 combination study of tazemetostat with R-CHOP in high-risk, front-line FL and diffuse large B-cell lymphoma (DLBCL) patients, is nearly complete with 111 patients out of a target of approximately 122 patients in DLBCL and 61 patients out of a target of approximately 62 patients in FL enrolled as of February 23, 2022. Epizyme, in collaboration with LYSA, anticipates presenting interim results from the Phase 2 portion of the study in the second half of 2022.
CELLO-1 Phase 2 study ~75% enrolled; updated safety run-in data and interim data expected in second half of 2022: The Phase 2 efficacy portion of the CELLO-1 study (EZH-1101), which is evaluating tazemetostat plus enzalutamide compared to enzalutamide monotherapy in metastatic castration-resistant prostate cancer patients (mCRPC), is approximately 75% enrolled toward a target of 80 patients. Epizyme expects to complete enrollment in the randomized Phase 2 portion of the study in 2022 and anticipates presenting updated data from the safety run-in portion as well as interim data from the Phase 2 portion of the study in the second half of 2022.
Initiated Phase 1b/2 tazemetostat hematological basket study (EZH-1501): During the fourth quarter of 2021, Epizyme initiated EZH-1501, its Phase 1b/2 signal finding basket study evaluating tazemetostat combinations in patients with hematological malignancies. Epizyme has entered into a clinical supply agreement with Roche for the bispecific cohort of the Company’s Phase 1b/2 basket study. This cohort will evaluate the investigational use of TAZVERIK (tazemetostat), in combination with mosunetuzumab, Roche’s investigational CD20xCD3 T-cell engaging bispecific antibody, for patients with R/R FL who have received two or more prior lines of therapy. Epizyme plans to provide updates as EZH-1501 reaches key enrollment milestones and plans to provide preliminary data from EZH-1501 in the second half of 2022.
Initiated first-in-human study of EZM0414 (SET-101): During the fourth quarter of 2021, Epizyme initiated the SET-101 study, a first-in-human Phase 1/1b study of EZM0414, Epizyme’s novel, first-in-class, oral SETD2 inhibitor, in adult patients with R/R multiple myeloma (MM) and R/R DLBCL. The Company expects to enroll between 30-36 patients in the Phase 1 dose escalation portion of the study. In October 2021, the FDA granted Fast Track designation for EZM0414 in adult patients with R/R DLBCL, and in January 2022, the FDA granted Orphan Drug designation for EZM0414 for MM. Epizyme plans to provide updates as the study reaches key enrollment milestones, along with preliminary data from SET-101 in 2022.
2022 Operating Plan Updates and Revised Financial Guidance

As part of Epizyme’s ongoing efforts to execute more effectively and advance its long-term growth strategy, the Company announced the following:

External Spending and Workforce Reductions: On March 1, 2022, the Company announced a further reduction of operating expenses, including a reduction in force of approximately 12% of its current employees. Estimated severance and termination costs of approximately $2.8-3.2 million are expected to be recorded in the first quarter of 2022.
Pipeline Reprioritization: Given the breadth of Epizyme’s current tazemetostat clinical development program, the Company has discontinued enrollment in its Phase 2 study of tazemetostat in combination with rituximab (SYMPHONY-2, EZH-1401), as well as its Phase 1/1b basket study evaluating tazemetostat combinations in patients with solid tumors (EZH-1301). The decision to discontinue enrollment in these studies was based on evolving market dynamics and a continued focus on optimizing the Company’s investments and eliminating potentially overlapping studies. The Company continues to study tazemetostat in combination with other therapies for both hematologic and solid tumor malignancies, both in ongoing Company-sponsored studies as well as investigator-initiated studies.
Revised 2022 Financial Guidance: 2022 total non-GAAP adjusted operating expenses are now expected to be between $160-180 million, compared to the prior guidance of $170-190 million. Based on the current operating plan, the Company expects that its existing cash, cash equivalents and marketable securities as of December 31, 2021, together with the $79.5 million in net proceeds raised from the common stock offering in January 2022, and expected cash generated from product sales, will be sufficient to fund planned operating expenses and capital expenditure requirements and pay debt service obligations as they become due, into the third quarter of 2023, without incorporating potential milestone payments, expense reimbursements from existing collaboration agreements or any future business development activities.
Fourth Quarter and Full Year 2021 Financial Results:

Cash Position: Cash, cash equivalents and marketable securities were $176.8 million as of December 31, 2021.
Revenue: Total revenue for the fourth quarter of 2021 was $11.6 million, compared to $4.5 million for the fourth quarter of 2020. Total revenue for the full year ended December 31, 2021 was $37.4 million, comprised of $30.9 million in net product revenue of TAZVERIK in the U.S. and $6.5 million in collaboration and other revenue.
Operating Expenses: Total GAAP operating expenses were $62.9 million for the fourth quarter of 2021 and $275.4 million for the full year ended December 31, 2021, compared to $70.5 million for the fourth quarter of 2020 and $241.2 million for the full year ended December 31, 2020. Total non-GAAP adjusted operating expenses were $54.7 million for the fourth quarter of 2021 and $243.4 million for the full year ended December 31, 2021, compared to $62.8 million for the fourth quarter of 2020 and $209.6 million for the full year ended December 31, 2020.
R&D expenses: GAAP R&D expenses were $28.9 million for the fourth quarter of 2021 and $131.0 million for the full year ended December 31, 2021, compared to $33.7 million for the fourth quarter of 2020 and $110.9 million for the full year ended December 31, 2020. Non-GAAP adjusted R&D expenses were $26.6 million for the fourth quarter of 2021 and $122.0 million for the full year ended December 31, 2021, compared to $31.5 million for the fourth quarter of 2020 and $101.3 million for the full year ended December 31, 2020.
SG&A expenses: GAAP SG&A expenses were $30.9 million for the fourth quarter of 2021 and $134.0 million for the full year ended December 31, 2021, compared to $35.0 million for the fourth quarter of 2020 and $125.2 million for the full year ended December 31, 2020. Non-GAAP adjusted SG&A expenses were $25.9 million for the fourth quarter of 2021 and $115.1 million for the full year ended December 31, 2021, compared to $30.5 million for the fourth quarter of 2020 and $106.2 million for the full year ended December 31, 2020.
Net Loss (GAAP): Net loss attributable to common stockholders was $50.7 million, or $0.49 per share, for the fourth quarter of 2021 and $251.1 million, or $2.45 per share, for the full year ended December 31, 2021, compared to $66.2 million, or $0.65 per share, for the fourth quarter of 2020 and $231.7 million, or $2.29 per share, for the full year ended December 31, 2020.
A reconciliation of non-GAAP adjusted financial measures directly comparable to GAAP financial measures is presented in the table attached to this press release.

Conference Call Information
Epizyme will host a conference call today, March 1, at 8:30 a.m. ET. To participate, please dial (877) 844-6886 (domestic) or (970) 315-0315 (international) and refer to conference ID 4082815. A webcast, as well as supplemental slides to support the webcast, will be available in the investor section of the Company’s website at www.epizyme.com, and will be archived for 60 days following the call.

About Non-GAAP Financial Measures
In addition to financial information prepared in accordance with the U.S. generally accepted accounting principles (GAAP), this press release includes the following non-GAAP financial measures: total non-GAAP adjusted operating expenses on a historical and projected basis, non-GAAP adjusted cost of product revenue, non-GAAP adjusted R&D expenses on a historical basis and non-GAAP adjusted SG&A expenses on a historical basis. Epizyme derives these non-GAAP financial measures by excluding certain expenses and other items from the respective GAAP financial measure, that is most directly comparable to each non-GAAP financial measure. Specifically, the non-GAAP financial measures exclude stock-based compensation expense and depreciation and amortization of intangibles. The Company’s management believes that these non-GAAP financial measures are useful to both management and investors in analyzing its ongoing business and operating performance. Management does not intend the presentation of these non-GAAP financial measures to be considered in isolation or as a substitute for results prepared in accordance with GAAP, but as a complement to provide greater transparency. In addition, these non-GAAP financial measures may differ from similarly named measures used by other companies. A quantitative reconciliation of projected total non-GAAP adjusted operating expenses to total GAAP operating expenses is not available without unreasonable effort primarily due to the Company’s inability to predict with reasonable certainty the amount of future stock-based compensation expense.

About TAZVERIK (tazemetostat)
TAZVERIK is a methyltransferase inhibitor indicated for the treatment of:

Adults and pediatric patients aged 16 years and older with metastatic or locally advanced epithelioid sarcoma not eligible for complete resection.
Adult patients with relapsed or refractory follicular lymphoma whose tumors are positive for an EZH2 mutation as detected by an FDA-approved test and who have received at least two prior systemic therapies.
Adult patients with relapsed or refractory follicular lymphoma who have no satisfactory alternative treatment options.
These indications are approved under accelerated approval based on overall response rate and duration of response. Continued approval for these indications is contingent upon verification and description of clinical benefit in confirmatory studies.

The most common (≥20%) adverse reactions in patients with epithelioid sarcoma are pain, fatigue, nausea, decreased appetite, vomiting and constipation. The most common (≥20%) adverse reactions in patients with follicular lymphoma are fatigue, upper respiratory tract infection, musculoskeletal pain, nausea and abdominal pain.

View the U.S. Full Prescribing Information here: Epizyme.com

About EZM0414
EZM0414 is a potent selective, oral, small molecule, investigational drug agent that inhibits the histone methyltransferase, SETD2, which plays a role in oncogenesis. SETD2 methylates histone as well as non-histone proteins, and this activity is involved in several key biological processes including transcriptional regulation, RNA splicing, and DNA damage repair. Based on the preclinical data on SETD2 inhibition by EZM0414 in multiple settings, including high risk t(4;14) multiple myeloma (MM) and in other B-cell malignancies such as diffuse large B-cell lymphoma (DLBCL), the Company is conducting SET-101, a Phase 1/1b study of EZM0414, for the treatment of adult patients with relapsed or refractory MM and DLBCL.

On March 1, 2022 ADC Therapeutics SA (NYSE: ADCT), a commercial-stage biotechnology company improving the lives of those affected by cancer with its next-generation, targeted antibody drug conjugates (ADCs) for patients with hematologic malignancies and solid tumors, reported that Chris Martin, DPhil, Chief Executive Officer, will participate in a fireside chat at Cowen’s virtual 42nd Annual Health Care Conference on Tuesday, March 8th at 2:10 p.m. EST (Press release, ADC Therapeutics, MAR 1, 2022, View Source [SID1234609287]).

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A live webcast of the presentation will be available via the Events & Presentations page in the Investors section of ADC Therapeutics’ website, ir.adctherapeutics.com. A replay of the webcast will be available for approximately 30 days.

On March 1, 2022 Quanterix Corporation (NASDAQ: QTRX), a company digitizing biomarker analysis to advance the science of precision health, reported it has entered into a collaboration with Eli Lilly and Company (Lilly) to advance the diagnosis, monitoring and treatment of Alzheimer’s disease (Press release, Eli Lilly, MAR 1, 2022, View Source [SID1234609286]). As part of the collaboration, Quanterix will receive a non-exclusive, world-wide license to Lilly’s proprietary P-tau217 antibody technology for potential near-term use in research use only products and services, and future in vitro diagnostic applications. The parties have also entered into a collaboration agreement, which establishes a framework for future projects focused on the development of Simoa immunoassays. As part of this agreement, Lilly will fund $11 million of development with the Quanterix Accelerator group this year. The other financial terms were not disclosed.

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These new agreements represent a commitment to advance blood-based biomarkers into routine clinical use. Plasma biomarkers have recently emerged as potential tools to speed clinical trial enrollment, improve clinical trial outcomes, eliminate the invasive techniques required to monitor drug efficacy and lower clinical trial costs. The initial collaboration under the agreements is expected to be focused on P-tau217, a blood-based biomarker that has shown diagnostic promise for early Alzheimer’s detection.

For Alzheimer’s disease, current diagnostic testing techniques, including PET imaging and lumbar punctures, are often difficult to obtain, more invasive and late. Both Quanterix and Lilly see the compelling value of plasma-based diagnostic tools to broaden access to testing, facilitate earlier Alzheimer’s disease diagnosis, identify candidates for emerging therapeutics and monitor disease progression with a simple blood test. These tests can help address the urgent need of patients, their families, physicians and the broader healthcare system.

"We’re thrilled to collaborate with Lilly in developing innovative diagnostics solutions to revolutionize the diagnosis and treatment of Alzheimer’s," said Kevin Hrusovsky, Chairman and Chief Executive Officer, Quanterix and Founder of Powering Precision Health. "Our collaboration leverages Lilly’s advanced antibody technology with the ultra-sensitive Simoa technology, which we believe has the potential to identify Alzheimer’s early in the pathology, potentially before the onset of severe symptoms – a concept we call ‘neurodiagnostic therapy.’ We believe this collaboration has the potential to advance the field of Alzheimer’s research, treatment and diagnostics."

"Lilly has a long-standing commitment to patients and their families globally suffering from Alzheimer’s disease and other forms of dementia," said Mark Mintun, Lilly Senior Vice President, Research and Development – Neuroscience, and President of Avid Radiopharmaceuticals. "We’re excited about continuing our collaboration with Quanterix and combining Lilly’s P-tau217 and Quanterix’ Simoa technologies to propel the development of plasma-based biomarkers to facilitate Alzheimer’s disease diagnosis and enable access to treatment."

Last year, Lilly presented new data from the Phase 2 TRAILBLAZER-ALZ study at the Alzheimer’s Association International Conference generated through Quanterix’ highly sensitive Simoa technology. The study utilized the Simoa HD-X platform and assays developed by Quanterix using Lilly’s proprietary antibody technology to measure P-tau217, and reported a significant reduction in plasma levels of phosphorylated tau protein after treatment with donanemab, its investigational therapy for Alzheimer’s disease.

On March 1, 2022 Perrigo Company plc (NYSE: PRGO) ("Perrigo" or the "Company"), a leading provider of Consumer Self-Care Products, reported financial results for the fourth quarter and fiscal year ended December 31, 2021 (Press release, Perrigo Company, MAR 1, 2022, View Source [SID1234609285]). All comparisons are against the prior year fiscal fourth quarter and fiscal year, unless otherwise noted.

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President and CEO, Murray S. Kessler commented, "In the face of another year of unprecedented pandemic-related challenges, the Perrigo team achieved the Company’s three primary strategic objectives – divesting the generic RX business, reallocating the sale proceeds to acquire a star consumer self-care asset in HRA Pharma, and significantly reducing uncertainty by favorably settling the Irish Tax assessment. Perrigo’s transformation into a focused, consumer-centric Self-Care company is now complete and our focus going forward is on long-term, profitable growth."

Kessler continued, "While our big three strategic objectives were achieved, COVID-19 related business interruption in the form of historically low cough/cold sales early in the year and supply chain disruptions and material price inflation later in the year significantly impacted our 2021 business results. However, sales growth improved sequentially each quarter during 2021 as consumer demand rebounded strongly as the year progressed behind a normalized level of cough, cold and flu illnesses. Actions were also taken to address third quarter supply chain disruptions in the U.S. allowing us to meet strong fourth quarter demand for our customers, albeit at a higher cost. We are entering 2022 with significant topline momentum."

Kessler concluded, "We are also entering 2022 with a higher level of cost inflation and COVID-19 related productivity challenges, which negatively impacted our second half 2021 gross margin. We expect to overcome these headwinds in the second half of 2022, driven in part by increased pricing, higher volumes and productivity gains. Our guidance reflects strong topline growth and depressed margins in the first half of 2022, anticipating that as gross margin pressure eases and as the highly accretive acquisition of HRA closes by mid-year, Perrigo is poised for turbocharged sales and earnings growth. We are excited about our future and remain confident in our consumer Self-Care strategy. I am especially grateful to all of Perrigo’s employees worldwide who have kept the Company running throughout the pandemic, and also want to acknowledge our Ukrainian colleagues and their families. Our hearts and support are with you."

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 Consolidated Statements of Operations, Balance Sheets and Statements of Cash Flows.

Fourth Quarter 2021 Perrigo Results from Continuing Operations

Perrigo net sales for the fourth quarter were $1.1 billion, an increase of $52 million, or 4.9%. Acquisitions accounted for 0.2 percentage points of growth, while unfavorable currency movements offset growth by 0.8 percentage points. Organic net sales growth was 5.5%. Of note, the prior year fourth quarter included six more shipping days than the current quarter.

Net sales in the quarter were driven by 1) the addition of $41 million in contract manufacturing sales to the divested RX business, 2) higher incidences of cough/cold and flu-like illnesses leading to an increase of $38 million in cough/cold sales, 3) higher net sales in the CSCA Nutrition and CSCI Skincare and Personal Hygiene categories, and 4) increased pricing across both Consumer Self-Care segments. These drivers also benefited from new product sales and e-commerce growth. These increases were partially offset by 1) lower net sales in the CSCA Healthy Lifestyle, CSCI VMS and Global Oral Care categories, 2) discontinued products of $11 million, 3) net unfavorable currency movements of $9 million, and 4) lower net sales in the CSCA Mexico business of $7 million.

Fourth quarter reported operating income was $47 million in 2021 compared to $38 million in 2020. Adjusted operating income increased $15 million, or 12.5%, to $132 million in 2021. This increase was driven by 1) higher profit new products, and 2) lower operating expenses, including planned lower advertising & promotion investments, and Project Momentum cost savings. These results were partially offset by $28 million in lower operating efficiencies, including lower volumes resulting in unfavorable plant overhead absorption, higher materials costs and increased freight expenses.

Reported net income was $32.1 million, or $0.24 per diluted share, compared to a net loss of $52.2 million, or $0.39 per diluted share in the prior year period. Excluding certain charges as outlined in Table I, fourth quarter 2021 adjusted net income was $82 million, or $0.60 per diluted share, compared to $64 million, or $0.47 per diluted share, last year due to the factors described above.

Fourth Quarter 2021 Business Segment Results from Continuing Operations

Consumer Self-Care Americas Segment

CSCA fourth quarter net sales of $736 million increased $35 million, or 5.0%. Primary category drivers are provided below.

Upper Respiratory
Net sales of $137 million increased 26.4% due primarily to higher incidences of cough/cold and flu-like illnesses that led to strong demand for cough/cold products, particularly store brand liquid-based cough/cold and pseudoephedrine-based allergy products.

Digestive Health
Net sales of $131 million were flat due primarily to growth in e-commerce, offset by temporary packaging constraints on a specific product, which is expected to alleviate during the second half of 2022, and timing of shipments in antacids.

Pain & Sleep-Aids
Net sales of $113 million increased 3.4% due primarily to strong demand for children’s analgesics products due to higher incidences of cough/cold and flu-like illnesses, partially offset by share declines in the national brand of naproxen sodium, which impacted demand for the store brand version, and lower sales in Mexico.

Nutrition
Net sales of $109 million increased 12.2% due primarily to new product launches in infant formula, including hypoallergenic formula and contract manufacturing formulas. Net sales were also driven by growth in U.S. store brand infant formula and continued growth in the oral electrolytes business, partially offset by lower infant formula sales to Canadian customers.

Oral Care
Net sales of $85 million decreased 1.4% due primarily to delayed receipt of products manufactured outside the U.S., leading to unfulfilled customer orders.

Healthy Lifestyle
Net sales of $83 million decreased 13.9% due primarily to the discontinuation of diabetes products and lost distribution of certain smoking cessation products that annualized in the quarter.

Skincare & Personal Hygiene
Net sales of $53 million decreased 3.4% due primarily to lower sales of creams for topical fungal infections and minoxidil, partially offset by growth in e-commerce.

Vitamins, Minerals, and Supplements ("VMS") and Other
Net sales of $26 million increased 43.6% due primarily to contract manufacturing sales to the divested RX business.

Reported operating income was $93 million in 2021 compared to $117 million in 2020. Adjusted operating income decreased $22 million to $110 million driven by lower operating efficiencies, including lower volumes resulting in unfavorable plant overhead absorption, higher materials costs and increased freight expenses. These factors were partially offset by lower operating expenses, including Project Momentum cost savings.

Consumer Self-Care International Segment

CSCI net sales of $369 million increased $16 million, or 4.6% including a positive impact of 0.6 percentage points from acquisitions partially offset by a negative impact of 2.4 percentage points from unfavorable currency movements. Organic net sales growth was a strong 6.4%. Primary category drivers are provided below.

Skincare & Personal Hygiene
Net sales of $86 million increased 13.1%, or 15.7% excluding the impact of currency, driven primarily by increased market share in the ACO skincare franchise, new product launches in the Sebamed skincare portfolio, and the October 30, 2020 acquisition of three Eastern European OTC Dermatology Brands. This growth was partially offset by lower sales in Australia.

Upper Respiratory
Net sales of $82 million increased 29.7%, or 32.6% excluding the impact of currency, as the higher incidences of cough/cold and flu-like illnesses led to strong demand for cough/cold products, particularly Bronchostop,Coldrex and U.K. store brands. New products also drove growth in the quarter.

VMS
Net sales of $55 million decreased 10.6%, or 8.5% excluding the impact of currency, due primarily to strong performance in the prior year period of vitamin D-based products as well as residual impact from the third quarter 2021 recall of certain batches of Davitamon and Abtei.

Pain & Sleep-Aids
Net sales of $53 million decreased 1.8%, or an increase of 0.4% excluding the impact of currency, due primarily to an increase in U.K. store brand, which was offset by lower demand in Italy for Optalidon, a paracetamol-based analgesics product, and lower sales in Australia.

Healthy Lifestyle
Net sales of $39 million decreased 4.7%, or 2.7% excluding the impact of currency, as benefits from competitor supply issues and growing demand for NiQuitin smoking cessation products were more than offset by lower net sales in the XLS Medical weight management franchise due primarily to lower category consumption.

Oral Care
Net sales of $23 million decreased 19.3%, or 17.6% excluding the impact of currency, due primarily to delayed receipt of product manufactured outside the E.U., leading to unfulfilled customer orders.

Digestive Health and Other
Net sales of $30 million increased 9.4%, or 12.3% excluding the impact of currency, due primarily to new distribution of Kijimea, a medical food for the dietary management of irritable bowel syndrome, and higher sales of other distribution brands.

Reported operating income was $13 million in 2021 compared to an operating loss of $13 million in 2020. Adjusted operating income increased $26 million, or 77.7%, to $60 million due primarily to 1) higher gross profit flow-through resulting from increased net sales, and 2) lower operating expenses, including lower planned advertising & promotion investments, and Project Momentum cost savings.

Fiscal Year 2021 Perrigo Results from Continuing Operations

Perrigo net sales for the fiscal year were $4.1 billion, an increase of $51 million, or 1.2%, including positive impacts of 1.5 and 1.1 percentage points from favorable currency movements and acquisitions, respectively. These gains were partially offset by 0.7 percentage points from divestitures. Organic net sales declined 0.7%, including a negative impact of 1.7 percentage points related to lower net sales of cough/cold products worldwide.

Net sales growth was driven by 1) $61 million from contract manufacturing sales to the divested RX business, 2) $46 million from acquisitions, 3) growth in the CSCI Skincare and Personal Hygiene and VMS categories, and in CSCA Nutrition and Skincare & Personal Hygiene categories, 4) $61 million in net favorable currency movements, and 5) increased pricing across both Consumer Self-Care segments. These drivers also benefited from new product sales and strong e-commerce growth. These increases were partially offset by 1) a decline in net sales of $68 million from cough/cold products, 2) discontinued products of $38 million, 3) $29 million from divestitures, and 4) lower net sales in the CSCA Healthy Lifestyle category.

Fiscal year 2021 reported operating income increased $145 million to $410 million, compared to $265 million in 2020. Adjusted operating income decreased $61 million to $479 million in 2021. This decrease was driven by 1) $80 million in lower operating efficiencies, including lower volumes resulting in unfavorable plant overhead absorption, higher materials costs and increased freight expenses, and 2) lower gross profit flow-through, principally from the decline in cough/cold sales. These results were partially offset by 1) the net impact from acquisitions and divestitures, and 2) lower operating expenses, including lower advertising & promotion investments compared to the prior year, and Project Momentum cost savings.

Reported net loss was $131 million, or a loss of $0.98 per diluted share, versus reported net income of $44 million, or $0.32 per diluted share, in the prior year. Excluding certain charges as outlined in Table I, fiscal 2021 adjusted net income was $278 million, or $2.06 per diluted share, versus $320 million, or $2.33 per diluted share, last year due to the factors described above.

Fiscal Year 2021 Business Segment Results from Continuing Operations

Consumer Self-Care Americas Segment

Consumer Self-Care Americas reported net sales of $2.7 billion were flat compared to the prior year, including a positive impact of 0.9 percentage points from acquisitions. Organic net sales declined 1.1%, including a negative impact of 1.4 percentage points due to lower net sales of cough/cold products compared to the prior year. Global supply chain disruptions, including a lack of truck drivers in the U.S. and record backups at global shipping ports, dampened net sales by an additional 1.4 percentage points. Primary category drivers are provided below.

Upper Respiratory
Net sales of $483 million decreased 4.5% due primarily to the historically weak 2020/21 cough/cold season and the recall of an allergy product in the third quarter of 2021. Increased pricing and new products partially offset these declines.

Digestive Health
Net sales of $475 million increased 0.8% due primarily to sales of ‘national brand better’ products, new products and e-commerce. These drivers were mostly offset by competition for a proton pump inhibitor and the re-launch of a national brand acid reducer, which gained market share from competing store brand products.

Pain & Sleep-Aids
Net sales of $405 million decreased 6.7% due primarily to the historically weak 2020/21 cough/cold season, partially offset by higher sales of store brand diclofenac 1%.

Nutrition
Net sales of $402 million increased 3.5% driven by new products, including in the infant formula contract manufacturing business, and continued growth in oral electrolytes. These drivers were partially offset by lower sales of U.S. store brand infant formula due primarily to supply constraints earlier in the year.

Oral Care
Net sales of $312 million increased 8.2% due primarily to one quarter of inorganic growth stemming from the April 2020 acquisition of Dr. Fresh and strong growth in the base business during the first half of 2021. These drivers were partially offset by delayed receipt of product manufactured outside the U.S. in the second half, leading to unfulfilled customer orders.

Healthy Lifestyle
Net sales of $298 million decreased 15.5% due primarily to the discontinuation of diabetes products and lost distribution of certain smoking cessation products that annualized in the fourth quarter.

Skincare & Personal Hygiene
Net sales of $219 million increased 9.3% due primarily to higher sales in the minoxidil franchise and the Scaraway brand, partially offset by lower sales of creams for topical fungal infections.

VMS and Other
Net sales of $99 million increased 90.4% due primarily to contract manufacturing sales to the divested RX business.

Reported operating income was $207 million in 2021 compared to $465 million in 2020. Adjusted operating income decreased $94 million to $434 million driven by lower operating efficiencies, including lower volumes resulting in unfavorable plant overhead absorption, higher materials costs and increased freight expenses. These factors were partially offset by lower advertising and promotion expenses and Project Momentum cost savings.

Consumer Self-Care International Segment

CSCI net sales of $1.4 billion increased $50 million, or 3.6%, including positive impacts of 4.0 percentage points and 1.6 percentage points from favorable currency movements and acquisitions, respectively. These gains were partially offset by 2.1 percentage points from divestitures. Organic net sales growth was flat, including a negative impact of 2.2 percentage points due to lower net sales of cough/cold products compared to the prior year. Primary category drivers are provided below.

Skincare & Personal Hygiene
Net sales increased 12.1%, or 7.2% excluding the impact of currency, to $394 million driven primarily by the October 30, 2020 acquisition of three Eastern European OTC Dermatology Brands, increased market share in the ACO skincare franchise and new product launches in the Sebamed skincare portfolio. These drivers were partially offset by a decline in the anti-parasite portfolio and lower sales in Australia.

Upper Respiratory
Net sales of $226 million decreased 11.3%, or 13.7% excluding the impact of currency, due primarily to the historically weak 2020/21 cough/cold season, partially offset by new products.

VMS
Net sales of $217 million increased 8.2%, or 4.0% excluding the impact of currency, due primarily to a strong performance of Granufink, herbal medicines to keep bladder function healthy, and the launch of the Probify line of probiotics.

Pain & Sleep-Aids
Net sales of $202 million increased 6.0%, or 2.1% excluding the impact of currency, as higher sales of U.K. store brand and Tiger Balm were partially offset by declines in other pain products due primarily to the historically weak 2020/21 cough/cold season.

Healthy Lifestyle
Net sales of $179 million increased 8.4%, or 3.7% excluding the impact of currency, as growing demand for NiQuitin smoking cessation products and higher net sales in Australia were partially offset by lower net sales in the XLS Medical weight management franchise due primarily to lower category consumption.

Oral Care
Net sales of $96 million decreased 2.0%, or 5.9% excluding the impact of currency, due primarily to delayed receipt of product manufactured outside the E.U. in the second half of the year, leading to unfulfilled customer orders.

Digestive Health and Other
Net sales of $131 million decreased 2.2%, or 6.1% excluding the impact of currency, due primarily to lower distribution sales in the E.U. partially offset by higher sales in Australia.

Reported operating income was $36 million in 2021 compared to $32 million in 2020. Adjusted operating income increased $13 million, or 6.7%, to $212 million as lower operating expenses, including lower planned advertising & promotion investments compared to the prior year and Project Momentum cost savings, more than offset unfavorable product mix.

Fiscal 2022 Outlook

Based on current currency exchange and spot rates, and excluding expected benefits from the acquisition of HRA Pharma, the Company expects:

Net sales growth of 3.5% to 4.5%, inclusive of negative impacts of approximately 2.0 percentage points from the planned divestiture of the Latin American businesses and 1.5 percentage points from adverse currency movements,
Organic net sales growth of 7.0% to 8.0%,
First half margin compression and second half margin expansion,
An adjusted effective tax rate of approximately 23%,
Adjusted diluted EPS of $2.10 to $2.30,
Cash flow from operations as a percentage of adjusted net income of 95% to 105%.
Assuming a June 30, 2022 closing and based on current currency exchange rates, the Company expects the acquisition of HRA Pharma to add:

Net sales of $170 – $190 million and adjusted diluted EPS of approximately $0.30 in 2022.
The Company cannot reconcile its expected adjusted diluted earnings per share to diluted earnings per share under "Fiscal 2022 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.

On March 1, 2022 Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS), a clinical-stage biotechnology company advancing novel biotherapeutics through its proprietary Anticalin technology platform for respiratory diseases, cancer, and other indications, reported financial results for the fiscal year ended December 31, 2021 and provided an update on the Company’s recent and anticipated future developments (Press release, Pieris Pharmaceuticals, MAR 1, 2022, View Source [SID1234609284]).

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"Last year was one of steady execution as we laid the groundwork for 2022, which we believe promises to be the most important catalyst year in the Company’s history, including key efficacy data for cinrebafusp alfa and PRS-060/AZD1402. We announced a collaboration with R&D leader Genentech, reported data from several clinical and preclinical programs, and initiated multiple clinical trials. Later this year, we expect to report topline data from the phase 2a trial of PRS-060/AZD1402, which has recently cleared the safety gate for the 1 mg and 3 mg dose cohorts. Beyond PRS-060/AZD1402, we currently have two bispecific immuno-oncology programs in clinical development and plan on initiating clinical development for our proprietary inhaled-delivery idiopathic pulmonary fibrosis (IPF) drug program, PRS-220, later this year, with generous grant support from the Bavarian government," said Stephen S. Yoder, President and Chief Executive Officer of Pieris. "Through these initiatives, we have advanced our pipeline assets while strengthening our balance sheet through partnerships, grant funding, and focused utilization of our ATM facility, all with the focus of driving toward our key inflection points."

PRS-060/AZD1402 and AstraZeneca Collaboration: Enrollment of part 2a (efficacy of 1 mg and 3 mg cohorts) and part 1b (safety of 10 mg cohort) has begun following successful completion of the sponsor safety review of part 1a (safety of 1 mg and 3 mg cohorts) of the multi-center, placebo-controlled phase 2a study of dry powder inhaler-formulated PRS-060/AZD1402. PRS-060/AZD1402 is an IL-4 receptor alpha inhibitor under development in collaboration with AstraZeneca for the treatment of moderate-to-severe asthma. Pieris and AstraZeneca expect to announce topline data from the phase 2a study this year, although the companies are actively evaluating the feasibility of study timelines in the current geopolitical environment and will update guidance in the orderly course of business, if needed.Upon completion of the study, which is being sponsored and funded by AstraZeneca, Pieris may choose to exercise its co-development option, which would be on a 25% cost-share basis with a cost cap or a 50% cost-share basis without a cost cap. Separately, Pieris will have a future option to co-commercialize PRS-060/AZD1402 in the United States.
Cinrebafusp Alfa (PRS-343 ) : In January 2022, the first patient was dosed in the phase 2 study of cinrebafusp alfa, a 4-1BB/HER2 Anticalin-based bispecific for the treatment of HER2-expressing gastric cancer. The two-arm, multicenter, open-label phase 2 study is evaluating the efficacy, safety, and tolerability of cinrebafusp alfa in combination with standard of care agents ramucirumab and paclitaxel in patients with HER2-high gastric cancer and in combination with tucatinib in patients with HER2-low gastric cancer. Pieris plans to report data from the HER2-low arm this year. Separately, the Company plans to disclose data from the HER2-high arm in 2023.
PRS-344/S095012 and Servier Collaboration: The first patient was dosed in November 2021 in the phase 1/2 study of PRS-344/S095012, a 4-1BB/PD-L1 Anticalin-based bispecific for the treatment of solid tumors, triggering an undisclosed milestone payment to Pieris. Pieris holds exclusive commercialization rights for PRS-344/S095012 in the United States and will receive royalties on any ex-U.S. sales for this program. Additionally, Servier is continuing development of PRS-352, an undisclosed Anticalin-based bispecific beyond 4-1BB.
PRS-220: Pieris remains on track to begin a phase 1 trial this year for PRS-220, a proprietary inhaled Anticalin protein targeting connective tissue growth factor for the treatment of IPF.
Year End Financial Update:

Cash Position – Cash and cash equivalents totaled $117.8 million for the year ended December 31, 2021, compared to a cash and cash equivalents balance of $70.4 million for the year ended December 31, 2020. The increase since December 2020 is due to cash received from new and existing collaboration agreements, including milestone achievements. In addition, during 2021, the ATM program was utilized to raise a total of $38.5M in net proceeds at an average price of $4.85 per share. These increases were partially offset by cash used to fund operations in 2021.

R&D Expense – R&D expenses were $66.7 million for the year ended December 31, 2021, compared to $46.5 million for the year ended December 31, 2020. The increase reflects higher spending on preclinical and manufacturing activities for PRS-220, an increase in manufacturing costs across multiple immuno-oncology programs, higher clinical costs on cinrebafusp alfa and higher employee related costs. These increases were partially offset by lower manufacturing costs on PRS-060, which were fully reimbursed.

G&A Expense – G&A expenses were $16.5 million for the year ended December 31, 2021, compared to $16.7 million for the year ended December 31, 2020. Total G&A spending was consistent year-over-year as higher fixed and variable compensation and higher insurance costs in 2021 were offset by lower legal, accounting, and project management costs, along with lower one-time office and building equipment costs related to the move to the new R&D facility in Hallbergmoos, Germany in the prior year.

Other Income – For the year ended December 31, 2021, $3.7 million of other income was recorded for PRS-220 program costs that qualified for reimbursement under the Bavarian grant that was announced in June 2021. The Bavarian government reimburses these qualifying program costs as incurred over the PRS-220 development period.

Net Loss – Net loss was $45.7 million or $(0.71) per share for the year ended December 31, 2021, compared to a net loss of $37.2 million or $(0.68) per share for the year ended December 31, 2020.

Conference Call :

Pieris management will host a conference call beginning at 8:00 AM EST on Tuesday, March 1, 2022, to discuss the full-year financial results and provide a corporate update. Individuals can join the call by dialing +1-877-407-8920 (US & Canada) or +1-412-902-1010 (International). Alternatively, a listen-only audio webcast of the call can be accessed here .

For those unable to participate in the conference call or listen to the webcast, a replay will be available on the Investors section of the Company’s website, www.pieris.com .