On August 23, 2022 Medtronic plc (NYSE:MDT) reported financial results for its first quarter of fiscal year 2023, which ended July 29, 2022 (Press release, Medtronic, AUG 23, 2022, View Source [SID1234618587]).

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Key Highlights

"We’re executing in a challenging environment with several pipeline catalysts approaching." Chairman & CEO Geoff Martha

FY23 Q1 Earnings
FY23 Q1 Earnings
GAAP diluted EPS of $0.70 increased 25%; non-GAAP diluted EPS of $1.13 decreased 17%, in-line with expectations
Revenue of $7.4 billion decreased 8% as reported and 4% organic, ahead of expectations
Company reiterates FY23 revenue and EPS guidance
The company reported worldwide revenue of $7.371 billion, a decrease of 8% as reported and 4% on an organic basis. The organic comparison excludes a $351 million negative impact from foreign currency translation and a $20 million contribution from the company’s recent acquisition of Intersect ENT, which is reported in the Specialty Therapies division in the Neuroscience Portfolio. Unless otherwise stated, all revenue growth rates in this press release are on an organic basis, which excludes the impact of foreign currency translation and revenue from the Intersect ENT acquisition. The company’s first quarter organic revenue results reflect the impact of known supply chain shortages, as well as unfavorable comparisons to the prior year given last year’s strong ventilator sales and market procedure recovery following the third COVID-19 wave.

As reported, first quarter GAAP net income and diluted earnings per share (EPS) were $929 million and $0.70, respectively, increases of 22% and 25%, respectively. As detailed in the financial schedules included at the end of this release, first quarter non-GAAP net income and non-GAAP diluted EPS were $1.502 billion and $1.13, respectively, decreases of 18% and 17%, respectively. The company’s earnings reflect the continued impact to certain procedure volumes and the macroeconomic impacts of inflation and foreign currency translation.

First quarter U.S. revenue of $3.766 billion represented 51% of company revenue and decreased 8% as reported and 9% organic. Non-U.S. developed market revenue of $2.328 billion represented 32% of company revenue and decreased 10% as reported and increased 2% organic. Emerging Markets revenue of $1.276 billion represented 17% of company revenue and decreased 1% as reported and increased 2% organic.

"The company continues to execute in a challenging environment, delivering organic revenue above our guidance," said Geoff Martha, Medtronic chairman and chief executive officer. "As we look ahead, our supply chain is improving, we have several near-term pipeline catalysts approaching, and we are confident in our ability to accelerate growth."

Cardiovascular Portfolio
The Cardiovascular Portfolio includes the Cardiac Rhythm & Heart Failure (CRHF), Structural Heart & Aortic (SHA), and Coronary & Peripheral Vascular (CPV) divisions. Cardiovascular revenue of $2.713 billion decreased 6% as reported and 1% organic, with low-single digit declines in CRHF and CPV and flat year-over-year results in SHA, all on an organic basis.

Cardiac Rhythm & Heart Failure revenue of $1.393 billion decreased 6% as reported and 1% organic. Cardiac Rhythm Management revenue decreased low-single digits, with high-single digit declines in Defibrillation Solutions partially offset by mid-single digit growth in Cardiac Pacing Therapies, driven by mid-teens growth in Leadless Pacemakers from continued global adoption of Micra transcatheter pacing systems. Cardiovascular Diagnostics revenue increased low-single digits, as procedures remain under pressure market-wide. Cardiac Ablation Solutions revenue decreased low-single digits as a result of supply constraints in Western Europe, and COVID lockdowns in China.
Structural Heart & Aortic revenue of $741 million decreased 6% as reported and was flat year-over-year organic. Structural Heart decreased low-single digits, including low-single digit growth in transcatheter aortic valves (TAVR). Aortic declined mid-single digits given continued supply challenges. Cardiac Surgery increased mid-single digits, driven by strength in extracorporeal life support products and sales of the Avalus pericardial aortic surgical valve.
Coronary & Peripheral Vascular revenue of $579 million decreased 7% as reported and low-single digits organic. Coronary & Renal Denervation (CRDN) decreased mid-single digits, given the ongoing impact of COVID-19 on percutaneous coronary intervention (PCI) market procedures in many geographies. Peripheral Vascular Health decreased low-single digits, with declines in directional atherectomy and PTA balloons partially offset by growth in drug-coated balloons, vascular embolization, and superficial venous products.
Medical Surgical Portfolio
The Medical Surgical Portfolio includes the Surgical Innovations (SI) and the Respiratory, Gastrointestinal & Renal (RGR) divisions. Medical Surgical revenue of $2.001 billion decreased 14% as reported and 9% organic, with high-single digit declines in both SI and RGR. Excluding the impact of ventilator sales given the increased COVID-19 related demand in the prior year, Medical Surgical revenue decreased 7% organic.

Surgical Innovations revenue of $1.338 billion decreased 14% as reported and 9% organic. The division had low-double digit declines in Advanced Surgical Instruments given expected acute supply chain shortages of raw materials, and the impact of China COVID lockdowns and provincial value-based procurement (VBP) stapling tenders. These declines were partially offset by strength in Hernia & Wound Management, which increased mid-single digits.
Respiratory, Gastrointestinal & Renal revenue of $664 million decreased 14% as reported and 9% organic. RGR revenue decreased 3% organic excluding the impact of ventilator sales. Respiratory Interventions decreased mid-twenties, with sales of ventilators declining low-fifties as demand was well below pre-pandemic levels. Patient Monitoring increased low-single digits, with low-single digit declines in Nellcor pulse oximetry products offset by mid-single digit growth in Perioperative Complications products. Gastrointestinal revenue decreased low-single digits, with high-single digit declines in esophageal products partially offset by mid-single digit growth in chronic and colorectal products. Renal Care Solutions decreased low-double digits given product holds and supply chain challenges.
Neuroscience Portfolio
The Neuroscience Portfolio includes the Cranial & Spinal Technologies (CST), Specialty Therapies, and Neuromodulation divisions. Neuroscience revenue of $2.115 billion decreased 4% as reported and 2% organic, with mid-single digit declines in CST and Neuromodulation, partially offset by mid-single digit increases in Specialty Therapies, all on an organic basis.

Cranial & Spinal Technologies revenue of $1.043 billion decreased 7% as reported and 5% organic. Spine & Biologics decreased mid-single digits, with mid-teens declines in Biologics given customer ordering patterns, partially offset by mid-single digit Core Spine growth in the United States. Neurosurgery declined low-single digits, with declines in navigation and robotics partially offset by growth in powered surgical instruments, imaging, and CSF management.
Specialty Therapies revenue of $667 million increased 4% as reported and organic. Neurovascular increased low double-digits driven by strength in hemorrhagic stroke products. Pelvic Health decreased low-single digits on competitive pressures. ENT was flat year-over-year on an organic basis given supply constraints on several product lines.
Neuromodulation revenue of $405 million decreased 8% as reported and 5% organic. Brain Modulation decreased low-single digits, as significant declines of replacement devices were partially offset by increased share of initial implants from the continued adoption of the Percept PC deep brain stimulation (DBS) system and SenSight directional DBS lead system. Pain Therapies decreased high-single digits, with mid-single digit declines in both Interventional and Pain Stim, as well as low-double digit declines in Targeted Drug Delivery on a difficult comparison given a supply recovery in the prior year. The Pain Stim market remained under pressure given healthcare staffing challenges and higher payer pre-authorizations. At the same time, the company continued to win new implant share in Pain Stim on strong adoption of its Vanta and Intellis with DTM SCS neurostimulators.
Diabetes
Diabetes revenue of $541 million decreased 5% as reported and was flat year-over-year organic. U.S. revenue declined mid-teens, given the absence of new product approvals. This was offset by low-double digit organic growth in non-U.S. developed markets and mid-teens organic growth in emerging markets. International sales were driven by mid-twenties growth in sales of continuous glucose monitoring (CGM) products and low-double digit growth in consumable sales, offset by low-single digit declines in sales of durable insulin pumps.

Guidance
The company today reiterated its revenue growth and EPS guidance ranges for fiscal year 2023.

The company continues to expect organic revenue growth in its fiscal year 2023 in the range of 4% to 5%. If recent foreign currency exchange rates hold, fiscal year 2023 revenue growth would be negatively affected by approximately $1.4 billion to $1.5 billion versus the previously stated $1.0 to $1.1 billion impact.

The company continues to expect fiscal year 2023 diluted non-GAAP EPS in the range of $5.53 to $5.65, including an estimated 17 to 22 cent negative impact from foreign currency.

"While our markets are facing macroeconomic challenges, we’re focused on identifying ways to offset their impact to our financials," said Karen Parkhill, Medtronic chief financial officer. "Looking ahead, we expect organic revenue growth to improve each quarter, with the second half of the fiscal year much stronger than the first. We are optimistic about our future, as we create markets and realize new opportunities."

Webcast Information
Medtronic will host a webcast today, August 23, at 8:00 a.m. EDT (7:00 a.m. CDT) to provide information about its businesses for the public, investors, analysts, and news media. This webcast can be accessed by clicking on the Events icon at investorrelations.medtronic.com and this earnings release will be archived at news.medtronic.com. Medtronic will be live tweeting during the webcast on its Newsroom Twitter account, @Medtronic. Within 24 hours of the webcast, a replay of the webcast and transcript of the company’s prepared remarks will be available by clicking on the Events icon at investorrelations.medtronic.com.

Medtronic plans to report its fiscal year 2023 second, third, and fourth quarter results on November 22, 2022, February 21, 2023, and Thursday, May 25, 2023, respectively. Confirmation and additional details will be provided closer to the specific event.

Financial Schedules
The first quarter financial schedules and non-GAAP reconciliations can be viewed by clicking on the Investor Events link at investorrelations.medtronic.com. To view a printable PDF of the financial schedules and non-GAAP reconciliations, click here. To view the first quarter and fiscal year 2023 earnings presentation, click here.

On August 23, 2022 Phanes Therapeutics, Inc. (Phanes), an emerging leader in innovative discovery research and clinical development in oncology, reported that the first patient has been dosed in the phase 1 clinical study (NCT05431270) of PT199, an anti-CD73 monoclonal antibody (mAb) for the treatment of multiple advanced solid tumors (Press release, Phanes Therapeutics, AUG 23, 2022, View Source [SID1234618586]).

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PT199 is an anti-CD73 mAb with a differentiated mechanism of action and is designed to counter the adenosine-mediated immunosuppressive tumor microenvironment (TME). PT199 fully inhibits both soluble and membrane-bound CD73, unlike some other CD73 inhibitors which exhibit incomplete inhibition. Moreover, at higher concentrations, no loss of inhibition or "hook effect" is observed with PT199. Hence, PT199 addresses the limitations of current CD73 inhibitors and is expected to increase antitumor immune activation, and potentially offer a new treatment option for cancer patients.

"The CD73 pathway represents a very promising target for addressing the immunosuppressive TME and we are pleased to open this study and bring this potential best-in-class mAb to cancer patients who have few treatment options." said Dr. Ming Wang, Founder and CEO of Phanes Therapeutics.

The multi-center Phase I clinical trial of PT199 is evaluating the safety, tolerability, pharmacokinetics, pharmacodynamics, and preliminary efficacy of PT199, alone and in combination with a PD-1 inhibitor, in patients with locally advanced or metastatic solid tumors that have progressed after all available standard therapy or for which standard therapy has proven to be ineffective, intolerable, or is considered inappropriate. Enrollment in the trial is open to individuals aged 18 years and older who have measurable disease with at least 1 lesion amenable to response assessment per RECIST 1.1 criteria, adequate organ function, and an ECOG performance status of 0 to 1.

On August 23, 2022 K36 Therapeutics, Inc. ("K36"), a privately held biotechnology company developing novel targeted therapies for the unmet medical needs of cancer patients, reported that the U.S. Food and Drug Administration (FDA) has cleared its Investigational New Drug (IND) Application for the Company’s lead program KTX-1001. KTX-1001 is an investigational small molecule methyltransferase inhibitor of multiple myeloma SET domain known as MMSET, a major regulator of chromatin structure and transcription in multiple myeloma (Press release, K36 Therapeutics, AUG 23, 2022, View Source [SID1234618585]). K36 plans to initiate a Phase 1 clinical trial in the second half of 2022 to establish the safety, tolerability and preliminary efficacy of KTX-1001 in patients with relapsed and refractory multiple myeloma, enriching for patients who have the genetic translocation t(4;14).

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K36 also announced the formation of its Clinical Advisory Board comprised of Drs. Jesus Berdeja, Shaji Kumar, Thomas Martin, María-Victoria Mateos, Noopur Raje, David Siegel and Suzanne Trudel.

"We are proud to announce the clearance of our first IND following the initial 30-day FDA review, officially marking our transition to a clinical-stage company in only 16 months since company inception. This achievement demonstrates our team’s efficiency and focus toward our goal of advancing KTX-1001 and positively impacting the lives of patients and families suffering from multiple myeloma," said Terry Connolly, Ph.D., President and Chief Executive Officer of K36. "Along with this significant milestone, I am delighted to announce the establishment of our Clinical Advisory Board, bringing together a group of leading experts with deep expertise in developing breakthrough therapies for the treatment of multiple myeloma. This Board will complement the exceptional experience of our internal team and Dr. Lori Kunkel, our Independent Director."

K36’s Clinical Advisory Board includes:

Jesus Berdeja, M.D., Director of Myeloma Research, Sarah Cannon Research Institute at Tennessee Oncology, Nashville, TN

Shaji Kumar, M.D., Consultant, Division of Hematology, Professor of Medicine, Mayo Clinic, Rochester, MN

Thomas Martin, M.D., Clinical Professor of Medicine, Adult Leukemia and Bone Marrow Transplantation Program, and Associate Director, Myeloma Program, University of San Francisco, Helen Diller Family Comprehensive Cancer Center, San Francisco, CA

María-Victoria Mateos, M.D. Ph.D., Consultant Physician in the Haematology Department and Associate Professor of Medicine at the University of Salamanca, Spain

Noopur Raje, M.D., Director, Center for Multiple Myeloma, Professor of Medicine, Harvard, Medical School, Massachusetts General Hospital Cancer Center, Boston, MA

David Siegel, M.D., Ph.D., Chief of the Multiple Myeloma Division, John Theurer Cancer Center, Hackensack University Medical Center, Hackensack, NJ

Suzanne Trudel, M.D., M.Sc., Associate Professor of Medicine, University of Toronto, Clinician Scientist, Princess Margaret Hospital Cancer Centre, Toronto, Canada

"There remains a significant unmet need for new and more effective therapies that can benefit high-risk myeloma patients such as those with translocation t(4;14)," said Noopur Raje, M.D. "As we use expanded combinations in early lines, there is a need for new classes of agents like KTX-1001."

"BCMA T cell redirecting therapies and the use of quadruplet therapy in myeloma are incredible advances but still have not leveled the playing field for high-risk multiple myeloma patients," added Jesus Berdeja, M.D. "There is still a need for novel precision therapeutics such as KTX-1001, and we are excited to be a part of bringing this first-in-class agent into Phase 1 testing."

K36 expects to enroll approximately 50 patients in the Phase 1 study, including an expansion cohort that will recruit patients with the genetic translocation t(4;14).

About KTX-1001
KTX-1001 is a novel, first-in-class, potent, and selective methyltransferase inhibitor of the catalytic activity of lysine H3K36. It is an investigational and orally administered small molecule being developed initially for the treatment of relapsed and refractory multiple myeloma, with a focus on patients with the t(4;14) translocation.

About the KTX-1001 Phase 1 Clinical Trial
The Phase 1 clinical trial is a single-arm, open-label study in subjects with relapsed and refractory multiple myeloma. It is a multi-part clinical trial with dose escalation followed by an expansion cohort in patients with the genetic translocation t(4;14) to evaluate the safety, tolerability, and preliminary efficacy of different doses of KTX-1001.

On August 23, 2022 Nanostics Inc., a precision health diagnostics company, reported that it has received the CE-IVD Mark for its ClarityDX Prostate test (Press release, Clarity Pharmaceuticals, AUG 23, 2022, View Source [SID1234618584]). This regulatory milestone allows Nanostics to market and sell ClarityDX Prostate in Europe, as well as other countries that require the CE Mark for market access.

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The ClarityDX Prostate test uses a proprietary machine-learning algorithm that combines data from biological and clinical biomarkers to generate a risk score for clinically significant prostate cancer, defined as Gleason grade group 2 or higher, on prostate biopsy. The ClarityDX Prostate test is intended to be used as a reflex test for men with elevated levels of PSA and is designed to help physicians and patients make a more informed decision on whether to proceed with a biopsy or not.

"We’re excited to reach this regulatory milestone for our ClarityDX Prostate test built on our robust biomarker and machine learning platform," said John Lewis, CEO of Nanostics. "Using ClarityDX Prostate as a reflex test for men with elevated PSA levels will help physicians, patients, and their families make more-informed decisions on how best to proceed with prostate cancer screening and result in better health outcomes for men with prostate cancer."

Recently, Nanostics announced positive results from its 1,500-patient clinical validation study of its ClarityDX Prostate test, showing 94% sensitivity, 37% specificity, 49% positive predictive value, and 90% negative predictive value for predicting clinically significant (grade group ≥2) prostate cancer. Implementation could eliminate up to 37% of unnecessary biopsies and significantly reduce the number of unnecessary treatments for prostate cancer.

Compliance with the relevant EU legislation and attainment of the CE-IVD mark represents Nanostics’ commitment to developing and marketing in vitro diagnostic medical devices that meet stringent regulatory requirements. Nanostics is committed to expanding its regulatory portfolio to allow for market access in different jurisdictions.

On August 23, 2022 Innovent Biologics, Inc. ("Innovent") (HKEX: 01801), a world-class biopharmaceutical company that develops, manufactures, and commercializes high-quality medicines for the treatment of oncology, autoimmune, metabolic, ophthalmology and other major diseases, reported that the first patient dosing in Australia for its proprietary PD-1/IL-2 bispecific antibody fusion protein (R&D code: IBI363) in Phase I clinical trial for the treatment of patients with advanced solid tumors or lymphomas (Press release, Innovent Biologics, AUG 23, 2022, View Source [SID1234618582]). It is first candidate drug to conduct clinical trial in Australia in Innovent’s pipeline.

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Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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The study (NCT05290597) is an open-label, multi-center Phase I study evaluating the safety, tolerability, and preliminary efficacy of IBI363 in subjects with advanced solid tumors or lymphoma, and to determine the recommended Phase 2 dose (RP2D).

Interleukin 2 (IL-2), a cytokine secreted mainly by antigen-activated CD4 + T cells , is vital for maintaining CD4 + regulatory T cell (Treg) level, CD4 + T cell differentiation, and maintaining CD8 + T cell and natural killer cell activity. IL-2 was the first cytokine to be discovered and identified as playing a pivotal role in T-cell growth and expansion. Aldesleukin (IL-2) was approved by U.S. Food and Drug Administration for metastatic renal cell carcinoma and metastatic melanoma in the early 1990s, but it has not been widely used in clinic due to poor selectivity, narrow therapeutic window, and side effects.

IBI363, potential First-in-Class candidate drug, was independently developed by Innovent. Its active ingredient is PD-1/IL-2 bispecific antibody fusion protein. The IL-2 arm of IBI363 has been engineered to maximize efficacy and reduce toxicity, whereas the PD-1 binding arm achieves PD-1 blockade and selective IL-2 delivery. Therefore, IBI363 has both functions of simultaneously blocking PD-1/PD-L1 pathway and activating IL-2 pathway, allowing more precise and efficient targeting and activation of tumor specific T cells. IBI363 not only showed promising anti-tumor activity in a variety of tumor-bearing pharmacological models, but also exhibited prominent antitumor efficacy in PD-1 resistant and metastatic models; meanwhile, IBI363 demonstrated a good safety profile in preclinical in vivo models.

Dr. Morteza Aghmesheh, Southern Medical Day Care Centre Located in New South Wales, Australia, stated： "Wild type IL-2 is clinically validated as monotherapy, but limited by toxicity and low response rate due to poor selectivity. IBI363, a novel PD-1/IL-2 bispecific molecule, designed to selectively activates PD-1 positive T cells by cis-activating IL-2, but not PD-1 negative bystanders or naïve T cells, with the potential to significantly decrease toxicity related to IL-2 and potentially overcome immunotherapy resistance. We look forward to the positive results in the safety/tolerability and efficacy of IBI363 in the clinic."

Dr. Hui Zhou, Senior Vice President of Innovent, stated: "Most patients will develop primary or secondary resistance after treatments of immune checkpoint inhibitors. At present, treatment options are limited upon progression after immunotherapy, and there is a huge unmet clinical needs. IBI363, developed by scientists at Innovent Academy, can enhance anti-tumor immune response by reversing T cell exhaustion, improving the efficacy of immune checkpoint inhibitors especially for patients with resistance to immunotherapy or "cold tumors", while minimizing IL -2 related side effects. We are pleased that the first patient dose of IBI363 has been completed in Australia. In parallel, the IND for IBI363 has been approved by NMPA in China. We are looking forward to the positive results of IBI363 in patients with advanced solid tumors or lymphoma. IBI363 is our first molecule to initiate clinical study in Australia, which marks a solid step of Innovent’s global innovation strategy. The company will also accelerate the development of more innovative molecules with high global potential, taking advantage of cross-regional R & D and clinical resources, adhering to the long-term development strategy of "driven by innovation, developed through globalization" with an aim to benefit cancer patients worldwide."

About IBI363

IBI363, potential First-in-Class candidate drug, was self-developed by Innovent. Its active ingredient is PD-1/IL-2 bispecific antibody fusion protein, which simultaneously blocks PD-1/PD-L1 pathway and activates IL-2 pathway to stimulate T cell activation and proliferation, thus killing tumor cells and inhibiting tumor growth. Currently, Phase 1 studies of IBI363 are conducted in China and Australia (NCT05460767, NCT05290597) to assess the safety, tolerability, and preliminary efficacy of IBI363 in subjects with advanced solid tumors or lymphoma, and to determine the recommended Phase 2 dose (RP2D).